Technology Spillovers and Determinants of Firm Productivity: A Spatial Regression Approach

Abstract

The paper aims to investigate the determinants and spatial spillovers of firm productivity in the manufacturing industry of Vietnam during 2010-2019. The paper uses a spatial regression model to estimate the spatial dependence of firm-level TFP. The results show that the technology spillover occurs positively among firms in the region, and this effect decreases rapidly with spatial distance. In addition, the findings also show that firm productivity benefits from its R&D and export activities, employment density, market competition, and budgetary spending. Simultaneously, it also indicates that the indirect influence is smaller than the direct effect, but shows the same trend. From the above findings, the paper proposes essential policies for a domestic firm to access, learn and imitate technologies and apply them in production activities to improve productivity.