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Health Insurance Coverage and Firm Performance: Evidence Using Firm Level Data from Vietnam

  • Hiroyuki Yamada EMAIL logo and Tien Manh Vu

Abstract

In literature, there is limited direct evidence regarding the effect of health insurance coverage on firm performance and worker productivity. We study the impacts of health insurance on medium- and large-scale domestic private firms’ performance and productivity in Vietnam, using a large firm level census dataset. We find statistically, but suggestive, positive health insurance effects on both aggregate profit and profit per worker for both complying and non-complying firms when using the full sample. We further restrict the sample to specific industries. The positive health insurance effects could exist for both complying and non-complying firms in the heavy manufacturing and construction sector, while such positive effects could be only significant for complying firms in the wholesale/retail sectors. We could not find any evidence of positive health insurance effects in the light manufacturing sector. These results imply that the impacts of health insurance could be industry specific.

JEL Classification: D22; I13; I15; I18; O25

Acknowledgements

We would like to thank Yasuharu Shimamura, Koji Yamazaki, and the participants of the 2017 Asian Meeting of Econometric Society in the Chinese University of Hong Kong, Hong Kong, China for their helpful comments. This research was supported by the Japan Society for the Promotion of Science [Grant-in-Aid for Young Scientists 25780163] and Keio Gijuku Academic Development Funds.

Appendix

A Balancing test of propensity score estimations

ATTATU
Nearest 5Radius of 0.001KernelNearest 5Radius of 0.001Kernel
Full sample
Balancing test
t-value on the difference in means
ln (capital, million VND)−1.60−1.58−0.110.250.341.18
Share of long-term assets0.090.230.44−0.170.33−1.38
ln (the number of employees)0.320.311.32−0.68−0.34−0.16
ln (average wage per worker, million VND)0.01−0.130.20−0.17−0.250.41
Debt-asset ratio−0.51−0.51−0.711.110.991.36
Firm's years of operation (years)1.031.080.930.19−0.04−0.73
Owner/director's age (years)0.090.150.400.320.11−0.41
Owner/director's age (years) squared−0.30−0.210.090.380.16−0.26
Owner/director's gender (=1 if male and =0 if female)0.06−0.040.94−0.18−0.390.23
Light manufacturing sector
Balancing test
t-value on the difference in means
ln (capital, million VND)0.940.970.57−0.42−0.36−1.42
Share of long-term assets−0.32−0.310.48−1.05−1.080.26
ln (the number of employees)0.310.300.121.221.21−0.74
ln (average wage per worker, million VND)−0.87−0.86−1.621.541.49−0.05
Debt-asset ratio0.570.58−0.160.100.06−1.12
Firm's years of operation (years)0.450.460.970.120.100.75
Owner/director's age (years)0.950.931.21−0.48−0.48−0.21
Owner/director's age (years) squared1.010.991.04−0.39−0.37−0.11
Owner/director's gender (=1 if male and =0 if female)1.031.041.58−0.91−0.90−0.77
Heavy manufacturing sector
Balancing test
t-value on the difference in means
ln (capital, million VND)0.500.460.41−0.24−0.14−0.37
Share of long-term assets−0.56−0.50−0.290.350.28−0.15
ln (the number of employees)0.290.280.600.310.280.77
ln (average wage per worker, million VND)−1.25−1.28−0.93−0.89−0.81−0.21
Debt-asset ratio0.440.500.13−0.61−0.52−0.74
Firm's years of operation (years)1.521.531.310.830.690.89
Owner/director's age (years)−0.80−0.74−0.940.140.010.74
Owner/director's age (years) squared−1.04−0.99−1.150.350.220.98
Owner/director's gender (=1 if male and =0 if female)1.111.141.12−0.08−0.12−0.72
Construction sector
Balancing test
t-value on the difference in means
ln (capital, million VND)−0.85−0.79−0.74−0.050.080.94
Share of long-term assets−0.11−0.07−0.01−0.69−0.610.32
ln (the number of employees)0.090.080.66−1.26−1.29−0.85
ln (average wage per worker, million VND)0.330.360.560.660.55−0.24
Debt-asset ratio0.010.140.93−1.61−1.580.37
Firm's years of operation (years)−1.06−1.071.47−0.09−0.180.31
Owner/director's age (years)−0.06−0.200.680.600.470.18
Owner/director's age (years) squared−0.14−0.270.640.720.600.21
Owner/director's gender (=1 if male and =0 if female)−0.18−0.100.32−0.49−0.61−0.02
Wholesale/retail sector
Balancing test
t-value on the difference in means
ln (capital, million VND)0.770.75−0.171.370.660.68
Share of long-term assets−0.27−0.25−0.31−0.221.47−0.10
ln (the number of employees)0.330.290.27−0.22−0.330.99
ln (average wage per worker, million VND)−0.36−0.341.32−0.53−0.72−0.44
Debt-asset ratio0.570.60−0.160.84−0.250.70
Firm's years of operation (years)−0.73−0.73−1.210.360.640.60
Owner/director's age (years)−0.25−0.17−0.150.260.29−0.19
Owner/director's age (years) squared−0.25−0.18−0.180.260.31−0.17
Owner/director's gender (=1 if male and =0 if female)−0.20−0.19−0.780.450.45−0.12
  1. Note: 27 industry and 63 province dummies are omitted.

B Mean difference in outcome variables and regressors in the first stage probit

With health insuranceWithout health insuranceDifference
(1) Light manufacturing sector
Outcome variables
Aggregate profit after tax deduction613.453188.259425.195
(million VND)(2,337.923)(905.891)(80,126)***
Profit after tax deduction per employee3.5081.8001.708
(million VND)(15.155)(10.030)(0.564)***
Regressors in the first stage probit
ln (capital, million VND)9.6008.5281.073
(1.431)(1.390)(0.060)***
Share of long-term assets0.3980.3490.049
(0.245)(0.280)(0.011)
ln (the number of employees)4.6824.1820.500
(0.888)(0.749)(0.035)***
ln (average wage per worker, million VND)3.0952.9030.192
(0.447)(0.517)(0.020)***
Debt-asset ratio0.5550.4720.082
(0.274)(0.307)(0.012)***
Firm's years of operation (years)7.1504.9232.226
(5.998)(4.129)(0.225)***
Owner/director's age (years)45.78744.0031.784
(9.113)(9.085)(0.386)***
Owner/director's gender (=1 if male and =0 if female)0.6900.699−0.009
(0.462)(0.458)(0.019)
Sample size1,357940
(2) Heavy manufacturing sector
Outcome variables
Aggregate profit after tax deduction1,076.016194.194881.822
(million VND)(2,846.251)(987.843)(79.164)***
Profit after tax deduction per employee7.2072.1315.076
(million VND)(20.448)(10.509)(0.592)***
Regressors in the first stage probit
ln (capital, million VND)9.8878.8521.035
(1.213)(1.188)(0.041)***
Share of long-term assets0.3860.3630.023
(0.219)(0.237)(0.007)
ln (the number of employees)4.4163.9020.514
(0.767)(0.644)(0.024)***
ln (average wage per worker, million VND)3.2223.0300.192
(0.448)(0.487)(0.015)***
Debt-asset ratio0.5700.4890.081
(0.248)(0.277)(0.008)***
Firm's years of operation (years)7.0645.0632.001
(6.509)(3.994)(0194)***
Owner/director's age (years)46.26944.2781.992
(9.099)(9.117)(0.312)***
Owner/director's gender (=1 if male and =0 if female)0.8050.823−0.019
(0.396)(0.381)(0.013)*
Sample size2,1641,393
(3) Construction sector
Outcome variables
Aggregate profit after tax deduction442.787150.348292.439
(million VND)(1,367.499)(513.028)(28.280)***
Profit after tax deduction per employee4.3592.5101.849
(million VND)(13.003)(8.394)(0.301)***
Regressors in the first stage probit
ln (capital, million VND)9.7228.8370.885
(1.199)(1.087)(0.031)***
Share of long-term assets0.2430.2340.009
(0.203)(0.219)(0.005)*
ln (the number of employees)4.4094.0020.408
(0.777)(0.660)(0.020)***
ln (average wage per worker, million VND)3.3403.1430.197
(0.527)(0.528)(0.014)***
Debt-asset ratio0.6020.4830.119
(0.246)(0.277)(0.007)***
Firm's years of operation (years)6.7285.0881.641
(5.273)(3.527)(0.123)***
Owner/director's age (years)45.28544.3900.895
(8.693)(8.623)(0.240)***
Owner/director's gender (=1 if male and =0 if female)0.9080.9020.006
(0.289)(0.297)(0.008)
Sample size2,4792,696
(4) Wholesale/retail sector
Outcome variables
Aggregate profit after tax deduction645.592258.293387.300
(million VND)(2,095.714)(1,353.808)(71.030)***
Profit after tax deduction per employee8.1724.2963.876
(million VND)(29.322)(20.474)(1.009)***
Regressors in the first stage probit
ln (capital, million VND)10.0529.4910.561
(1.163)(1.127)(0.043)***
Share of long-term assets0.2310.241−0.011
(0.210)(0.221)(0.008)*
ln (the number of employees)4.0193.7950.223
(0.605)(0.542)(0.022)***
ln (average wage per worker, million VND)3.4523.3300.122
(0.500)(0.505)(0.019)***
Debt-asset ratio0.6690.6190.050
(0.229)(0.265)(0.009)***
Firm's years of operation (years)6.9665.4781.489
(4.369)(3.870)(0.160)***
Owner/director's age (years)44.51643.7030.813
(8.906)(9.036)(0.341)***
Owner/director's gender (=1 if male and =0 if female)0.7290.7240.005
(0.444)(0.447)(0.016)
Sample size1,9031,076
  1. Notes:

    Standard deviations are in parentheses for means and standard errors are in parentheses for the difference in mean.

    ***p < 0.01, **p < 0.05, *p < 0.10.

    27 industry and 63 province dummies are omitted.

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Published Online: 2018-09-12

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