Empirical Evidence of Structural ChangeThe Case of Vietnam’s Economic Growth

This study examines the patterns of structural change in economic development by drawing insights from the case of Vietnam. Empirical evidence from literature indicates that developing countries are likely to gain from structural transformation to boost the growth of labour productivity. While most East Asian countries have enjoyed significant structural transformation bonus, many African and Latin American economies, often endowed with rich natural resources, have benefited negligibly from this process. Vietnam, in particular, has gained substantially from its growth promoting structural transformation, contributing to nearly half of overall labour productivity improvement between 1990 and 2013. This structural change effect was modest in 1990–2000, strongest in 2000–07, and declining (but still significant) in 2007–13. The process has been associated with rapid expansion of the manufacturing and service sectors, change in export composition towards higher share of medium-and high-tech manufactures, and integration into global value chains. The expected slowdown in structural change suggests that the country would have to rely more on within-sector productivity improvement to enhance growth.