TOTAL FACTOR PRODUCTIVITY IN VIETNAMESE FOOD PROCESSING FIRMS: CONTROL FUNTION APPROACH

Abstract

This study applies the generalized method of moments model of Wooldridge (2009) with modification of Vincenzo Mollisi & Gabriele Rovigatti (2017) to estimate production function and measure total factor productivity of Vietnamese food processing firms in the period 2012 between 2017. The estimated results show that: (1) Food processing firms tend to be labor-intensive and experience decreasing return to scale; (2) The average contribution of total factor productivity to output is about 2.76; (3) The foreign direct investment food processing firms sector has the largest contribution of total factor productivity to output, followed by the state-owned sector and the last being the private sector.