The effects of capital, labor and random component on cooperative revenue in the Mekong delta region using the Oaxaca-Blinder decomposition method
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Abstract
This research aimed to estimate the effects of capital, labor and random components on cooperative revenue in localities of the Mekong delta region using the Oaxaca-Blinder decomposition method. The study used statistical panel data on revenue, number of employees and capital of cooperatives during the period 2015 - 2022 in 13 different provinces in the Mekong delta. The study employed Fixed Effects Model (FEM) regression using the Least Squares Dummy Variable (LSSV) approach and Random Effects Model (REM) with an Error Correction Model (ECM) specification to estimate the regression coefficients based on an extended Cobb-Douglas production function. Subsequently, the Oaxaca-Blinder decomposition method was applied to assess the impact of locational differences within the Mekong delta on the revenue of cooperatives. This impact was decomposed into two components: (1) the explained differences between the two groups attributable to labor and capital, and (2) the unexplained component or discrimination.
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