Premature deindustrialization risk in Vietnam

Abstract

Purpose This study aims to examine the premature deindustrialization risk in Vietnam. Design/methodology/approach This study uses a manufacturing–income relationship to conduct an empirical estimation. The latecomer index is adopted in the regression model to identify a downward shift of latecomer's relationship. Findings The empirical analysis indicates that there is a risk of premature deindustrialization in the Northern Midlands and Mountain Areas. The provinces with low trade openness or foreign direct investment may experience risk of premature deindustrialization. Practical implications This study proposes technology diffusion as a policy direction to prevent premature deindustrialization. Furthermore, the Vietnamese government should improve the business environment in the Northern Midlands and Mountain Areas by promoting and attracting export-oriented foreign direct investment. Originality/value This study is the first to examine premature deindustrialization in Vietnam based on provincial-level data.