East Asian Economic Review

Korea Institute for International Economic Policy (대외경제정책연구원)
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Minimum Wages and Firm Exports: Evidence from Vietnamese Manufacturing Firms

  • Nguyen, Dong Xuan (Vietnam National University Hanoi (VNU) - University of Economics and Business (UEB))
  • Received : 2020.10.26
  • Accepted : 2021.02.27
  • Published : 2021.03.30
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Abstract

This paper investigates the relationship between the minimum wage and firm's export behavior by using firm-level data of Vietnamese manufacturing enterprises over the period 2010 through 2015. In this regard, I apply the logistic regression model for the probability of exporting and the differences-in-differences analysis to the data, and find that raising minimum wage standards drive no new exporters but a rise in a firm's export sales. Less productive and more labor-intensive firms raise their amount of exports in response to increasing minimum wage levels. Being exposed to increasing minimum wage levels makes a firm under-perform in terms of export sales compared to non-exposed firms.

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