Spillover Effects of Foreign and Domestic Exporting Firms on Export Decisions of Local Manufacturing Firms: Evidence from Viet Nam

Arlan Brucal and Shilpita Mathews
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Arlan Brucal: University of Exeter Business School, Exeter
Shilpita Mathews: London School of Economics and Political Science, London

No DP-2021-44, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: By combining plant-level data from the Indonesian Manufacturing Survey and localised disaster data from the Emergency Events Database for the period 1990–2015, we were able to exploit both temporal and spatial variation to investigate the global market entry, survival, and exit of plants in the aftermath of a major flood event at the kabupaten (regency) level. Results from the combined propensity score matching and difference-in-difference approach suggest no strong evidence of instantaneous and persistent detrimental effects of initial experience of flooding on overall and female employment, but with delayed effect on output and output per worker. Plants that are connected and foreign-owned experienced a persistent decline in output per worker relative to their domestic counterparts in the aftermath of a flooding event. On average, flooding was not found to have a significant impact on plant entry. The results highlight that international trade has unintended consequences for firm resilience to flooding. Trade-offs and complementarities between globalisation and other SDGs, such as gender equality and poverty reduction, are discussed.

Keywords: Development; Flooding; Globalisation; Indonesia; Resilience; Sustainable development; Trade (search for similar items in EconPapers)
JEL-codes: F18 F23 O19 Q56 (search for similar items in EconPapers)
Date: 2021-12-16
New Economics Papers: this item is included in nep-env, nep-int and nep-sea
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