Abstract

This study provides a vital understanding of how local government capacity affects total factor productivity (TFP) growth in the context of an emerging economy. The sample of the study is a panel dataset of 63 Vietnamese provinces over the period of 2006-2017. We find that provinces that are high in self-financing have a positive effect on TFP growth, while low self-financing provinces have a negative effect on TFP growth. More interestingly, the impact of public governance is negative on TFP growth for high self-financing provinces, but is positive for low self-financing provinces. Our findings imply that the Vietnamese decentralisation regime drives high self-financing and low self-financing provinces to pursue different paths. High self-financing provinces defy governance reforms, leading to a race to the bottom.

摘要

本研究提供了对地方政府能力如何影响新兴经济体全要素生产率 (TFP) 增长的重要理解。该研究的样本是 2006-2017 年期间越南 63 个省份的面板数据集。我们发现自筹资金高的省份对 TFP 增长有积极影响，而自筹资金低的省份对 TFP 增长有负面影响。更有趣的是，公共治理对高自筹资金省份的 TFP 增长的影响是负面的，但对低自筹资金省份的影响是积极的。我们的研究结果表明，越南的分权制度促使自筹资金高的省份和自筹资金低的省份走不同的道路。高自筹资金的省份抗拒治理改革，导致逐底竞争。