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Does foreign investment benefit the exporting activities of Vietnamese firms?

Author

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  • Van Ha
  • Mark J. Holmes
  • Gazi Hassan
Abstract
Using firm‐level data, this paper examines the effects of foreign investment on the exporting behaviour of domestic firms in the Vietnamese manufacturing and service sectors. Applying the Heckman selection model on panel data and following the Wooldridge approach, we find that investment by foreign firms has a significant positive effect on the decision of domestic firms in the same and upstream sectors to export. The proportion of exports of domestic firms declines through horizontal and forward linkages, but increases through backward linkages in the manufacturing sector. However, there is only weak evidence in support of export spillovers on domestic firms in the service sector. We also find that the presence of foreign firms has differing effects on the exporting activities of low‐ versus high‐tech firms in the manufacturing sector.

Suggested Citation

  • Van Ha & Mark J. Holmes & Gazi Hassan, 2020. "Does foreign investment benefit the exporting activities of Vietnamese firms?," The World Economy, Wiley Blackwell, vol. 43(6), pages 1619-1646, June.
    • Handle: RePEc:bla:worlde:v:43:y:2020:i:6:p:1619-1646
    DOI: 10.1111/twec.12912
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    References listed on IDEAS

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    4. Quang Hoan Truong & Van Chung Dong, 2021. "Spillover Effects of Foreign and Domestic Exporting Firms on Export Decisions of Local Manufacturing Firms: Evidence from Viet Nam," Working Papers DP-2021-43, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Amza Mounchili Youwa & Henri Ngoa Tabi, 2022. "Does Multinationals Entry Mode Affect Local Firms’ Export Behaviours? Evidence from Cameroon," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(8), pages 413-423, August.
    6. Radovan Kastratović, 2023. "Exporting decision of agricultural firms: The role of foreign direct investment," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 960-984, October.
    7. Ha, Van & Holmes, Mark J. & Tran, Tuyen Quang, 2022. "Does foreign investment crowd in domestic investment? Evidence from Vietnam," International Economics, Elsevier, vol. 171(C), pages 18-29.
    8. Pham, Huy & Ha, Van & Le, Hanh-Hong & Ramiah, Vikash & Frino, Alex, 2024. "The effects of polluting behaviour, dirty energy and electricity consumption on firm performance: Evidence from the recent crises," Energy Economics, Elsevier, vol. 129(C).

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