Labor Productivity: Does Export Matter for Vietnamese Small and Medium Enterprises?

Several micro-data studies have found one-directional effect in the relationship between productivity and exports. Nevertheless, there is little evidence of the significant impacts of exports on productivity. Particularly, there is a literature gap regarding assessing whether engaging in exporting indeed influences productivity at the firm level in developing countries such as Vietnam. With an emphasis on Vietnam, this study aims to respond to the demand for further empirical evidence on the influence of exports on labor productivity. The research’s objective is to analyze the influence of exporting on labor productivity by examining Small and Medium Enterprises (SMEs) across different industries in the country’s context. According to the empirical findings using Bayesian statistics, export-oriented SMEs in Vietnam saw greater labor productivity. With managerial implications, firms need to have continual innovations in terms of technology, process, and products. They also need to keep learning from foreign markets in terms of buyer-seller relationships, quality management, foreign suppliers, international supply chain, foreign trade, technological innovation, and regulatory issues.