The Effect of Local Governance on Firm Productivity and Resource Allocation : Evidence from Vietnam

Tan, Shawn W. ; Tran, Trang T.

World Bank, Washington, DC

关键词: LOCAL GOVERNMENT;    PRODUCTIVITY;    RESOURCE ALLOCATION;    BUSINESS ENVIRONMENT;    GOVERNANCE;   

DOI  :  10.1596/1813-9450-8118
RP-ID  :  WPS8118

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Governance quality plays a key role inprivate sector development: competent bureaucrats not onlycreate good policies and regulations, but also effectivelyimplement them to shape the business environment. This paperexploit Vietnam’s decentralization of administrative taskssince the early 2000s to test this hypothesis. The paperexamines how changes in the provincial administration ofnational business regulations affect firms through twochannels: within-firm productivity levels and resourceallocation across firms. The results show that betteroverall business environment has a positive impact on firmproductivity, and this effect is driven by a reduction incorruption levels, the risks of land expropriation, andentry regulations. The analysis also finds thathigh-productivity firms are generally better able to takeadvantage of improvements in the business environment.However, better implementation of entry regulations mattersmost for less productive firms. The study does not findevidence for the impact of business environment quality onprovince-level market efficiency.