Influence of policy, operational and market conditions on seaport efficiency in newly emerging economies: the case of Vietnam

ABSTRACT

Located in Southeast Asia as one of the most dynamic economic regions in the world and close to north-south shipping routes, Vietnam’s seaports play a vital role in promoting its international trade and economic growth. And yet, most ports are small and owned by the public sector. Their performance is subject to various factors relating to government policy, operational and market conditions. Although the Government has been trying to improve the sector’s performance through corporatization, its corporatization model is unique in many ways compared with reform models in other countries. This study seeks to analyse the effects of government policy, operational and market conditions among other factors, on Vietnamese seaports’ efficiency. Double-bootstrap data envelopment analysis (DEA) and univariate and multivariate analyses were conducted using the data sample of 41 ports for years 2015 and 2016. The analysis results show that the factors of production, regional location and reform policy had a significant impact on port performance.

KEYWORDS:

• Microeconomic reform
• port policy
• port efficiency
• bootstrapped DEA
• Vietnam

JEL CLASSIFICATION:

• R53
• R40
• R38

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Authors’ calculation based on World Bank (2020).

² Authors’ calculations based on Vietnam Seaports Association (2018).

³ The constant-returns-to-scale assumption is only appropriate when all firms are operational at their optimal scale (Charnes, Cooper, and Rhodes 1978). In Vietnamese seaports vary substantially in size. Therefore, this study’s analysis is conducted under the assumption of variable returns to scale.:

⁴ Output-orientation is applied in our DEA model because some input variables, such as berth length or terminal area, are quasi-fixed and cannot adjust for a better performance.