- P-ISSN 2586-2995
- E-ISSN 2586-4130
KDI Journal of Economic Policy. Vol. 47, No. 3, August 2025, pp. 115-128
https://doi.org/10.23895/kdijep.2025.47.3.115
Utilising matched employer-employee data from Vietnamese small and medium enterprises (SMEs) surveys spanning the time frame of 2007-2015, we investigate the extent to which firms share economic rents with their employees through wage adjustments. Our analysis reveals rent-sharing elasticity of 0.08-0.1, demonstrating that small firms with limited market power engage in rent sharing in response to increased economic rents, measured as value added per employee. This rent sharing is prominent if a worker is related to an owner and is engaged in non-production jobs. However, the analysis based on worker panel data indicates caution against interpreting the results as causal evidence.
Rent Sharing, Profits, Vietnam, Small and Medium Enterprises (SMEs), Matched Employer-Employee Data
J31, J46, O12