How Does Technology Diffusion Increase Speed of TFP Convergence at Firm Level? Exploring the Effects of High Technology Firms on Linkages: Evidence from Vietnam Enterprises
The objective of this research is to give an explanation why low-technology enterprises can catch up with high-technology ones even when they are unable to invest in R&D. The answer is the existence of technology diffusion, however, how does technology diffusion take place and can we quantify this process? To answer this question, we structure variables which represent the transmission channel of technology diffusion from high-technology enterprises to low-technology ones, then quantifying impacts of technology diffusion and applying this methodology into the analysis of impacts of technology diffusion on total factory productivity (TFP) convergence of Vietnamese enterprises. We establish two TFP series in accordance with the methods developed by Olley-Pakes [7] and extended by Levinsohn and Petrin [5]. On the basis of two constructed TFP series, we estimate the unconditional convergence model and the convergence model under the effects of technology diffusion. The estimation results of two models show that the impacts of technology diffusion occur complicatedly but the total effect of the variables representing for impacts of technology diffusion on TFP convergence is positive and the speed of convergence in the model including the variables of technology diffusion is faster than one in the model excluding this variables.
