The origin of FDI and domestic firms’ productivity—Evidence from Vietnam

Bin Ni, Mariana Spatareanu, Vlad Manole, Tsunehiro Otsuki, Hiroyuki Yamada

Research output: Contribution to journalArticle

13 Citations (Scopus)

Abstract

This study examines how the origin of foreign investors affects the degree of horizontal and vertical technological spillovers, using firm-level panel data from Vietnam in 2002–2011. The results show a positive association between the presence of Asian firms in downstream sectors and the productivity of Vietnamese firms in supply industries, but no significant relationship in the case of European and North American affiliates. Within Asia, we find that foreign direct investment from China and Taiwan generates positive vertical spillovers to local suppliers. We hypothesize that distance, preferential trade agreements, and institutional or technological differences that affect the degree of local sourcing significantly impact vertical spillovers from foreign direct investment. The horizontal spillover effects are in general negative and statistically significant. Various robustness checks are performed.

Original languageEnglish
Pages (from-to)56-76
Number of pages21
JournalJournal of Asian Economics
Volume52
DOIs
Publication statusPublished - 2017 Oct

Keywords

  • FDI
  • Spillovers
  • Total factor productivity
  • Vietnam

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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