scholarly journals Foreign Direct Investment and the Survival of Domestic Private Firms in Viet Nam

2014 ◽  
Vol 31 (1) ◽  
pp. 53-91 ◽  
Author(s):  
Ari Kokko ◽  
Tran Toan Thang
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Private Firms ◽  
Viet Nam ◽  
Firm Level ◽  
Level Data ◽  
Vertical Fdi ◽  
Negative Effect ◽  
The Impact ◽  
Local Firms

Foreign direct investment (FDI) may benefit local firms in the host country through various kinds of spillovers, but it may also raise competition and result in the crowding out of domestic firms. Using detailed firm-level data for the period 2001–2008, this paper examines the aggregate effect of FDI on the survival of domestic private firms in Viet Nam. We estimate the impact of both horizontal and vertical FDI and explore how the presence of state-owned enterprises (SOEs) influences the exit hazard for private firms. The results suggest that horizontal and upstream FDI raise the exit hazard significantly, while downstream FDI may reduce the hazard. The presence of SOEs has a direct negative effect on the survival odds of local private firms in the same industry, but there is also an indirect impact on the exit hazard from FDI. Local firms are more vulnerable to foreign entry in sectors with high SOE shares. Looking at the net effects of FDI during the period 2001–2008, we find that results vary between sectors and over time but that the overall impact has been surprising small. The paper also discusses policy conclusions and implications for empirical analyses of spillovers from FDI.

scholarly journals Impact of Extensive and Intensive Margins of Foreign Direct Investment on Domestic Corporate Performance: Evidence from Japanese Automobile Parts Suppliers

2017 ◽  
Vol 16 (2) ◽  
pp. 187-209
Author(s):  
Toshiyuki Matsuura
Keyword(s):  
Foreign Direct Investment ◽  
Instrumental Variable ◽  
Direct Investment ◽  
Corporate Performance ◽  
Firm Level ◽  
Extensive And Intensive Margins ◽  
Level Data ◽  
Automobile Parts ◽  
The Impact ◽  
Parts Suppliers

This study uses firm-level data on Japanese automobile parts suppliers to investigate the impact of foreign direct investment (FDI) on domestic corporate performance. We use the automobile makers’ FDI as an instrumental variable for suppliers’ FDI and estimate the impact of both the extensive and intensive margins of FDI. We find that whereas the intensive margin of FDI does not significantly impact corporate performance, the extensive margin positively influences sales and total factor productivity. Furthermore, the impact of the initial FDI entry brings stronger effects than that of subsequent FDI flows.

scholarly journals The Impact of Foreign Direct Investment on Productivity of Domestic Firms: The Case of Sudanese Banking Industry

2021 ◽  
Vol 9 (02) ◽  
pp. 2081-2188
Author(s):  
Nasreldin Tomsah ◽  
Khloud Ali
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Banking Industry ◽  
Firm Level ◽  
Productivity Spillovers ◽  
Level Data ◽  
Show Evidence ◽  
Foreign Affiliates ◽  
Domestic Banks ◽  
The Impact

The research expands existing international business literature by exploring the impact of Foreign Direct Investment (FDI) on domestic banks. It investigates how FDI affects the productivity of domestic banks in Sudan. Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by FDI will spillover to domestic industries and increase their productivity. In contrast with earlier literature that tried to find positive interindustry spillovers from multinationals, this study focuses on effects operating in banking industry. The analysis, based on firm-level data from Sudan , the results show evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local counterparts . The data indicate that productivity spillovers are associated with foreign owned banks.

Does foreign direct investment influence R&D activity in the host country? Evidence from Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Van Ha ◽  
Mark J. Holmes ◽  
Gazi Hassan
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Probit Model ◽  
Innovation Activity ◽  
Heckman Selection Model ◽  
Content Type ◽  
Domestic Firms ◽  
The Impact ◽  
Local Firms

PurposeThis study focuses on the linkages between foreign direct investment and the research and development (R&D) and innovation activity of domestic enterprises in Vietnam.Design/methodology/approachThe Heckman selection model approach is applied to a panel dataset of nearly 7,000 Vietnamese firms for the 2011–2015 study period to investigate the impact of foreign presence on the R&D of local firms through horizontal and vertical linkages. Probit model estimation is employed to examine how foreign investment influences the innovation activity of local companies.FindingsWhile there are a small number of firms carrying out R&D activities in Vietnam, foreign or joint domestic–foreign venture firms are less inclined than domestic firms to undertake R&D. Domestic factors that include capital, labor quality, location and export status of firm have a significant effect on the decision of domestic firms to participate in R&D activity. Only forward linkages and the gross firm output are found to have an impact on the R&D intensity of domestic enterprises, while other factors appear to have no significant influence on how much firms spend on R&D activities.Practical implicationsIn order to promote the R&D activity of domestic firms, policy should focus on (1) the backward linkages between local firms in downstream sectors with their foreign suppliers in upstream sectors, and (2) the internal factors such as labor, capital or location that affect the decisions made by domestic firms.Originality/valueGiven that foreign investment may affect R&D and innovation activity of local firms in host countries, the impact is relatively unexplored for many emerging economies and not so in the case of Vietnam. The availability of a unique survey on Vietnamese firm technology and competitiveness provides the opportunity to address this gap in the literature.

scholarly journals Does Chinese Inward Foreign Direct Investment Improve the Productivity of Domestic Firms? Horizontal Linkages and Absorptive Capacities: Firm-Level Evidence from Ethiopia

2020 ◽  
Vol 12 (7) ◽  
pp. 3023 ◽  
Author(s):  
Engidaw Sisay Negash ◽  
Wenjie Zhu ◽  
Yangyang Lu ◽  
Zhikai Wang
Keyword(s):  
Sustainable Development ◽  
Foreign Direct Investment ◽  
Absorptive Capacity ◽  
Direct Investment ◽  
Efficient Technology ◽  
Chinese Firms ◽  
Firm Level ◽  
Domestic Firms ◽  
Positive Spillovers ◽  
Local Firms

Publicized as a global call for action in 2015, the United Nations General Assembly (UNGA) has forwarded an agenda of resolutions to achieve the goals of sustainable development by 2030 (SDGs). Due to the specific challenges of funding gaps and the lack of advanced technology, the majority of Sub-Saharan African (SSA) countries are still behind the standard of world development. Since foreign direct investment (FDI) has the potential to bring much-needed capital and efficient technology, FDI has often been considered as a vigorous source of development, even for sustainable development for under-developing economies experienced today. Conspicuously, Chinese outward FDI (OFDI) into SSA has seen a strong upward trend in the 21st Century, after China proclaimed its “go global” strategy. Ethiopia is one of the favored destinations of the trend of Chinese OFDI, which also substantially continues through the SSA region. The hosting economy of Ethiopia expected that Chinese inward FDI comes with capital, efficient technology, and knowledge to contribute innovations through directly improving productivity and competitiveness via technological diffusion to domestic industries and eventually for sustainable development. Against this backdrop, this study utilizes firm-level panel datasets from Ethiopia to address the following couple of research questions. The first question is: are there any productivity differences between the establishment of Chinese-affiliated and domestic firms in the manufacturing industry in Ethiopia? The second is, does the presence of Chinese-affiliated firms provide productivity spillovers for domestic firms in the same industry level for socio-economic development? The investigation was carried out using 2554 manufacturing firm census data, from which 15.04% were Chinese firms operating in Ethiopia. We used the ordinary least squares (OLS) and generalized-method-of-moments (GMM) two-step approaches for estimations. Our findings revealed that, generally, Chinese firms were more productive than local firms and their presence can bring positive potential productivity spillover effects for domestic firms. Specifically, we found that local firms have gained significant positive spillovers when they had a high absorptive capacity, whereas low-absorptive capacity firms suffered negative spillovers. We also found that non-exporting domestic firms experience significant positive spillovers from the presence of Chinese firms.

scholarly journals THE ANALYSIS OF DETERMINANT OF FOREIGN DIRECT INVESTMENT IN INDONESIA

2020 ◽  
Vol 8 (1) ◽  
Author(s):  
Etsuco Siomi
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Gross Domestic Product ◽  
Direct Investment ◽  
Government Expenditure ◽  
Investment Climate ◽  
European Regions ◽  
Macroeconomic Conditions ◽  
Negative Effect ◽  
The Impact

The analysis results show that changes in macroeconomic conditions such as exchange rate, government expenditure and gross domestic product in Indonesia have a significant effect on foreign direct investment (FDI) Indonesia, while Inflation has a negative effect on foreign direct investment FDI and the monetary crisis has a negative effect on the development of FDI in Indonesia. So that the severe financial crisis in the American and European regions today, the impact on foreign direct investment (FDI) Indonesia is still within the limits of tolerance. Therefore, although there are still problems in the investment climate in Indonesia, the outlook for investment in Indonesia over the next period is still good, although perhaps with the growth of investment slows down.

Foreign Direct Investment and Technology Spillovers in the Turkish Manufacturing Industry

2013 ◽  
pp. 30-51 ◽  
Author(s):  
Alper Sönmez ◽  
Mehmet Teoman Pamukçu
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Foreign Ownership ◽  
Output Growth ◽  
Foreign Firms ◽  
Technology Spillovers ◽  
Firm Level ◽  
Definition Of ◽  
Local Firms

Technology spillovers from foreign to local firms in emerging economies are considered to be the most important channel through which Foreign Direct Investment (FDI) influences the host economy. Empirical evidence about the existence, magnitude, and direction of FDI-related spillovers in these countries is contradictory, pointing to the necessity of conducting more econometric studies using firm-level data. The authors conduct an econometric analysis to assess the impact of FDI-related horizontal technology spillovers on output growth of local firms in the Turkish manufacturing industry over 2003-2006. When a broad definition of foreign ownership is adopted, their findings suggest that horizontal spillovers occur from foreign to local firms in the sector of activity. Export-oriented firms do not benefit from these spillovers in contrast to firms producing mainly for the local market. However, when foreign ownership is defined according to whether the minority or majority of capital is detained by the foreign partner, horizontal spillovers seem to originate from foreign firms with majority or full foreign ownership, while no such effect is associated with minority-owned foreign firms.

Socialist Protoglobalization and Patterns of Uneven Transnational Integration After 1989

2018 ◽  
pp. 108-141
Author(s):  
Besnik Pula
Keyword(s):  
Foreign Direct Investment ◽  
Institutional Change ◽  
Capital Flows ◽  
Joint Ventures ◽  
Direct Investment ◽  
Economic Liberalization ◽  
Organizational Processes ◽  
Firm Level ◽  
Policy Orientation ◽  
The Impact

This chapter looks at the rise of foreign direct investment (FDI), both as a new policy orientation, and as a process of capital flows with institutionally transformative consequences in postsocialist economies. While the previous chapters focused largely on political elites and macro-institutional change during the late socialist era, this chapter shifts attention to the impact of organizational processes at the firm level during the immediate postsocialist period in driving the transition towards globally integrated postsocialist industries. The chapter systematically examines patterns of institutional change from joint ventures to foreign direct investment across the region, and demonstrates the capacities of economies with the most diffuse experience with socialist proto-globalization in making the most rapid gains from globalization after economic liberalization post-1989.

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