Total factor productivity in Vietnamese agriculture and its determinants

  • Bao Dinh Ho

    Student thesis: Doctoral Thesis


    This research aims at providing a depth analysis of total factor productivity in Vietnamese agriculture and its determinants. Specifically, the research focuses on four major aspects: (a) measuring agricultural total factor productivity growth; (b) regional analysis of agricultural total factor productivity; (c) determinants of provincial agricultural total factor productivity levels; and (d) convergence in agricultural total factor productivity. The works on those aspects in this thesis could be considered as separate essays. The research uses both Data Envelopment Analysis and Stochastic Frontier Analysis to measure the sources of agricultural total factor productivity growth in Vietnam, based on provincial level data in the period 1990-2006. It concludes that (a) total factor productivity had grown during the period; (b) shift of the production possibility frontier (technical change) was the major source of total factor productivity growth, while actual production moved further away from the frontier (technical efficiency reduction); (c) pure technical efficiency change was the most important reason for explaining technical efficiency reduction; and (d) there was a trend of technical efficiency diversification among provinces. Regional analysis of total factor productivity in Vietnamese agriculture has been done in this thesis by using both global meta-frontier Malmquist index and meta-frontier Stochastic Frontier Analysis. By grouping all provinces into six regions, the thesis concludes that (a) not only gaps in agricultural production technology existed, but also these gaps widened among regions; North Midlands and Central Coast lagged further behind; (b) North provinces and Central Coast were better in exploiting their production condition efficiently, while South provinces were better in applying new production technology. The gaps in production technology among those regions were well explained by regional characteristics, especially input ratios (land per labour, tractor per labour). By using the concept of shadow price, implicit input value share and Tornqvist total factor productivity index, a model examining determinants of provincial differences in agricultural total factor productivity level was constructed in this thesis. It concludes that Vietnam’s agriculture has become relatively more capital-intensive during the period 1990-2006. The research found several important on-farm and off-farm determinants of agricultural total factor productivity such as provincial GDP per capita, credit access of agricultural household, land quality, size of agricultural population, percentage of non-farm rural population in total agricultural population, farm size, size of land plot, and land fragmentation. This thesis also tests the productivity convergence hypothesis in Vietnam’s agriculture by using both cross-section beta convergence and stochastic long-run convergence. It concludes provinces in the same regions with similar production conditions showed stronger evidence for convergence in their agricultural total factor productivity levels. This thesis suggests several policies for improving agricultural total factor productivity, which focused on three major issues of Vietnam’s agriculture: labour immobility, land consolidation and mechanization. Such policies include promoting labour mobility and resources accumulation in the agricultural sector, agricultural land consolidation, promoting agricultural credit, encouraging agricultural production technology transfer and resource mobility among provinces, developing irrigation activities and developing large scale agricultural areas.
    Date of Award2012
    Original languageEnglish
    SupervisorCraig Applegate (Supervisor), Shuangzhe Liu (Supervisor) & Greg Barrett (Supervisor)

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