The role of the food processing industry in the industrialisation strategy and development of Vietnam

Submission note: A thesis submitted in total fulfilment of the requirements for the degree of Doctor of Philosophy to the Department of Economics and Finance, La Trobe Business School, College of Arts, Social Sciences and Commerce, La Trobe University, Bundoora.

This thesis is centred on an examination of the manufacturing sector in Vietnam against the backdrop of a reform and industrialisation process aimed at transforming the country’s export activities and wealth and strengthening integration into the world economy. Specific focus is placed on the potential contribution of the food processing industry in this regard, relative to traditional labour-intensive manufacturing industries, such as apparel, footwear and furniture, which have historically formed the backbone of employment and manufacturing activity in Vietnam. The thesis undertakes a detailed descriptive and analytical comparative analysis of the two industry categories using multiple sources of firm, industry and trade information, and examining indicators and variables including export share, comparative advantage, employment generation, output and value-added creation, and domestic input content. The thesis presents a compelling case supporting an important current and future role for the food processing industry in the development and transition of the Vietnam manufacturing sector, based on evidence of positive employment per enterprise growth, greater output generation and value added creation, more domestic input content, and a comparable share of total exports relative to the traditional labour-intensive industries. The analysis identifies the fish products industry as a particular leading light in terms of domestic input content, output generation and degree of comparative advantage, suggesting a significant potential contribution of this industry to the achievement of Vietnam’s industrial objectives. In total, these outcomes debunk the proposition that Vietnam should focus only on its labour abundance as its primary competitive advantage. Instead, they are more supportive of the food processing industry, and particularly the processing of fish and fish products, being a means for Vietnam to enhance the value chain of its manufacturing sector, embrace technology and intellectual capital and maximise the development and wealth creation within the Vietnam economy.