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• W2994775939 abstract "Private sector development and the relationship between private firms and the state-owned sector continue to figure prominently in the debate about poverty reduction. Growth of private firms may generate economic opportunities, but changes of the role of the state in the economy may also carry social risks. The subnational dimension of the link between the private sector’s weight in the economy and poverty remains underexplored. How do changing regional patterns of private sector development shape the geography of poverty? Especially in transition economies, reforms altering conditions for private enterprises and foreign direct investment do not always proceed at the same speed in all regions. This paper examines the link between province-level changes in private firms’ formal employment share and poverty reduction in Vietnam’s provinces during 1999–2009. Particularly since 2000, Vietnam has taken large steps towards an equal administrative treatment of all firms irrespective of ownership. Provincial governments often enjoyed considerable freedom in their interpretation of reforms, contributing to differential province-level patterns of progress in private sector development. The empirical analysis combines data from Vietnam’s enterprise survey, independent poverty estimates, and two rounds of population censuses. Instrumental variable regressions reveal that larger increases of private firms’ employment share are associated with larger reductions in poverty. This finding demonstrates that allowing some regions to move faster or slower than others regarding reforms changing the conditions for private firms and foreign direct investment is likely to leave an imprint on the country’s geography of development. Multinational enterprises, rather than domestic private firms, emerge as drivers of the association identified in our analysis. The Vietnamese case therefore illustrates the poverty reduction potential of export-oriented activities of multinational enterprises, while simultaneously casting doubt on the contribution of small and medium sized enterprises to poverty alleviation." @default.
• W2994775939 created "2019-12-26" @default.
• W2994775939 creator A5024501951 @default.
• W2994775939 date "2020-03-01" @default.
• W2994775939 modified "2023-09-27" @default.
• W2994775939 title "Private sector development and provincial patterns of poverty: Evidence from Vietnam" @default.
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• W2994775939 doi "https://doi.org/10.1016/j.worlddev.2019.104747" @default.
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