Scale Elasticity, Congestion Management and Options for Firm Development in the Garment Industry of Vietnam
The garment industry plays a very important role in the Vietnamese economy, yet it has been operating inefficiently. Using a non-parametric approach (DEA) and data extracted from the surveys on enterprises in 2004, 2006 and 2007 conducted by the GSO of Vietnam, in this study we identify sources and degrees of congestion; measure degree of scale diseconomies, the percentage reduction in inputs congested and the percentage increase in value added of firms congested in inputs; estimate the total amount of fixed assets and number of workers wasted in garment firms and congestion-induced GDP losses. These will be bases for determining whether to expand (contract) the firm scale and improving firm productivity and competitiveness. Findings from this paper could have strategic implications for faster, efficient and sustainable development of the garment industry of Vietnam. Thus, the results of this paper will make a significant contribution to the development of the Vietnamese economy.
KeywordsDEA Scale elasticity Congestion Garment Industry Vietnam
JEL ClassificationC44 C61 D21 L25 L67 O12
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