The impact of buying external technology on employment and air quality: an empirical approach in Vietnamese manufacturing SMEs

Abstract

Purpose The purpose of this paper is to evaluate the current situation of buying external technology in Vietnamese manufacturing small and medium enterprises (SMEs) from 2013 to 2018. This paper also aims to examine the effect of buying technology on employment and environmental quality in Vietnam. Design/methodology/approach External technology purchase and its impact on employment and environmental quality are taken from the Vietnam annual enterprise survey and the using technology in production survey from 2013 to 2018. The estimation is based on a feasible generalized least squares method. Findings This study finds that external technology purchase in manufacturing SMEs increases the employment rate in the industries. External technology purchase in Vietnamese manufacturing SMEs also increases the level of environmental pollution. This is a negative side of purchasing technology for production because if the technology used is old, outdated and of poor quality, it will increase environmental pollution. In addition, the growth in employment increases air pollution. This shows that purchasing advanced technology selectively helps to increase the employment rate in Vietnamese manufacturing sector, which is followed by a positive impact on environmental quality. Research limitations/implications The limitation of this study is that the research period was only investigated from 2013 to 2018 because the General Statistics Office of Vietnam no longer surveys the dataset about using technology in production surveys after 2018. This study has been conducted at the firm level, so results cannot be easily extended to the macroeconomic level, also taking into account the data limitations in terms of sector coverage. Practical implications This paper provides necessary policy recommendations for the government and manufacturing SMEs to solve negative technology issues related to the labour market and air quality in Vietnam. The results are expected to help policymakers in Vietnam propose appropriate national science and technology programmes towards sustainable development in the coming decades. Originality/value This paper focuses on assessing the effects of buying external technology by Vietnamese small and medium-sized manufacturing enterprises on employment and air quality.