Young, 1995) maintain that the East Asian miracle is mainly due to capital accumulation and that technological progress is limited, others (e.g., Freeman, 1995; Krauger et al., 2000; Nelson and Pack, 1999; Pack and Page, 1994; Rodrik, 1997; World Bank, 1993: 56) argue that technological progress, particularly labor-saving technological change, fuelled the extraordinary economic growth that has constituted the out that the low “Asian miracle”. Rodrik (1997) explicitly pointed TFP growth rates found in most studies are problematic, because they failed to incorporate biased technological progress in their calculations. As shown in Figure 4, in the past decade, real rent to capital by sector increased almost at the same rate as the real wage, with the market interest rate, as a proxy for the opportunity cost of capital, changing more irregularly in Vietnam. As input prices change altogether, the ratio has stayed almost constant until 2006, as shown in Figure 5. The wage-rental ratio increased by about 10% from 2000 to 2008, yet the labor-capital ratio decreased more than two times faster, by about 35% during the same time period. As shown in Figure 5, both labor and capital productivities improved, indicating the presence of technological progress during the time period. Moreover, labor productivity grew at a higher rate, suggesting the possibility of technological change. [Insert Figure 4 and Figure 5 about here] exhibit changes in input prices and input intensities for the agriculture, Figure 6 to Figure 8 manufacturing, and service sectors. For both the agriculture and manufacturing sectors, wages climbed faster than the return to capital, partially due to higher marginal labor productivity. Both labor and capital per unit of output decline, suggesting the existence of technological progress in the agriculture and manufacturing sectors. Furthermore, production became more during the course of development, consistent with labor-augmenting technological change or institutional bias. Only for the service sector, returns to capital grew faster than wages, and factor intensity did not alter significantly during the period from 2000-2008. Different from the agriculture and manufacturing sectors, the service sector started with a much higher level of capital intensity in its production, and the transformation in input intensity is less dramatic. [Insert Figure 6 to Figure 8 about here]
Young, 1995) maintain that the East Asian miracle is mainly due to capital accumulation and that technological progress is limited, others (e.g., Freeman, 1995; Krauger et al., 2000; Nelson and Pack, 1999; Pack and Page, 1994; Rodrik, 1997; World Bank, 1993: 56) argue that technological progress, particularly labor-saving technological change, fuelled the extraordinary economic growth that has constituted the “Asian miracle”. Rodrik (1997) explicitly pointed out that the low TFP growth rates found in most studies are problematic, because they failed to incorporate biased technological progress in their calculations. As shown in Figure 4, in the past decade, real rent to capital by sector increased almost at the same rate as the real wage, with the market interest rate, as a proxy for the opportunity cost of capital, changing more irregularly in Vietnam. As input prices change altogether, the ratio has stayed almost constant until 2006, as shown in Figure 5. The wage-rental ratio increased by about 10% from 2000 to 2008, yet the labor-capital ratio decreased more than two times faster, by about 35% during the same time period. As shown in Figure 5, both labor and capital productivities improved, indicating the presence of technological progress during the time period. Moreover, labor productivity grew at a higher rate, suggesting the possibility of technological change. [Insert Figure 4 and Figure 5 about here] Figure 6 to Figure 8 exhibit changes in input prices and input intensities for the agriculture, manufacturing, and service sectors. For both the agriculture and manufacturing sectors, wages climbed faster than the return to capital, partially due to higher marginal labor productivity. Both labor and capital per unit of output decline, suggesting the existence of technological progress in the agriculture and manufacturing sectors. Furthermore, production became more during the course of development, consistent with labor-augmenting technological change or institutional bias. Only for the service sector, returns to capital grew faster than wages, and factor intensity did not alter significantly during the period from 2000-2008. Different from the agriculture and manufacturing sectors, the service sector started with a much higher level of capital intensity in its production, and the transformation in input intensity is less dramatic. [Insert Figure 6 to Figure 8 about here]