Title: Estimating inward regional FDI spillover in Vietnamese manufacturing firms: ownership structure and firm characteristics

Authors: Hien T.N. Huynh; Khoa T. Tran; Phuong V. Nguyen; Nga T.T. Le; Hoa D.X. Trieu

Addresses: The School of Business, International University, Vietnam National University – Ho Chi Minh City, 700000, Vietnam ' Center For Public Administration, International University, Vietnam National University – Ho Chi Minh City, 700000, Vietnam ' Center For Public Administration, International University, Vietnam National University – Ho Chi Minh City, 700000, Vietnam ' The School of Business, International University, Vietnam National University – Ho Chi Minh City, 700000, Vietnam ' The School of Business, International University, Vietnam National University – Ho Chi Minh City, 700000, Vietnam

Abstract: This paper aims to investigate whether the presence of foreign direct investment (FDI) delivers positive externalities to domestic firms in the same industry and region using recent detailed panel data for 87,195 Vietnamese firms from 2010 to 2015 and an aggregate input-output matrix. The results indicate that domestic firms in Northern Vietnam are positively affected by intra-industry FDI but negatively affected by intra-region FDI. Interestingly, FDI within both the same industry and region benefits domestic firms in the Central coast region but has insignificant effects in other geographical areas. Finally, while domestically owned and, to a lesser extent, joint-venture firms suffer from the presence of FDI within the same industry, they benefit from intra-region horizontal spillover. These findings have implications for policy makers and authorities seeking to attract FDI for continued economic growth in Vietnam that also benefits domestic firms.

Keywords: FDI; foreign direct investment; horizontal spillover; regional spillover; productivity; ownership types.

DOI: 10.1504/JGBA.2019.103316

Journal for Global Business Advancement, 2019 Vol.12 No.4, pp.542 - 563

Received: 24 Jul 2018
Accepted: 23 Aug 2019

Published online: 23 Oct 2019 *

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