Industry switching in developing countries

Arbeitspapier

Firm turnover (i.e. firm entry and exit) is a well-recognized source of sectorlevel productivity growth across developing and developed countries. In contrast, the role and importance of firms switching activities from one sector to another is little understood. Firm switchers are likely to be unique both from newly established entrants and exiting firms that close down. We build an empirical model that examines switching behaviour based on data from Vietnamese manufacturing firms during the period 2001-08. Our diagnostic shows that switching firms have different characteristics and behaviour as compared to entry and exit firms. They tend, inter alia, to be labour-intensive and seek out competitive opportunities in labour-intensive sectors in response to changes in the market environment. We also show that resource reallocations resulting from switching form an important component of productivity growth.

Object Details

• ISBN: 978-92-9230-416-4
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2011/49

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Industrialization; Manufacturing and Service Industries; Choice of Technology
• Subject: firm dynamics ; sector switching ; efficiency ; Vietnam ; Markteintritt ; Marktaustritt ; Verarbeitendes Gewerbe ; Unternehmensentwicklung ; Vietnam

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Newman, Carol ; Rand, John ; Tarp, Finn
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/54170
• Last update: 10.03.2025, 11:43 AM CET