The Nexus of ICT, Manufacturing Productivity and Economic Restructuring in Vietnam

The objective of this paper is to clarify the relationship between ICT application and labor productivity in Vietnamese manufacturing firms and connect it with the context of economic restructuring in Vietnam. The study uses data of 3,428 manufacturing firms from the General Statistics Office of Vietnam and regression models. In addition to the general model, the study also runs the models for sub-samples of firms of different production technology levels. Research results show two main points. First, information technology can enhance the labor productivity of Vietnamese manufacturing firms. This is true for both ICT hardware applications, ICT services, ICT software solutions, and employees’ ICT skills in firms. Second, manufacturing firms with higher levels of production technology use ICT more effectively and achieve a higher impact on labor productivity. The results confirm that the Vietnamese government can stimulate ICT application and digital transformation in firms, thereby increasing labor productivity and promoting economic restructuring in the direction of shifting from agriculture to industry and from low-tech industries to high-tech ones. The results also provide implications for business managers and policymakers in other developing countries who are adopting the digital economy as a development strategy.