Technology transfers, foreign investment and productivity spillovers: evidence from Vietnam

Carol Newman, John Rand, Theodore Talbot () and Finn Tarp
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Theodore Talbot: Department of Economics, University of Copenhagen

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: This paper provides new evidence on the relationship between foreign direct investment (FDI) and the productivity of domestic firms. Using a specially designed survey on a sample of over 7,500 manufacturing firms in Vietnam we uncover some of the mechanisms that explain productivity spillovers from FDI through vertical linkages along the supply chain. Our results suggest that domestic firms experience more productivity spillovers through forward linkages from foreign-input suppliers to domestic input users than through backward linkages from foreign customers to domestic producers of inputs. Productivity externalities from upstream sectors are associated with joint venture foreign investors while downstream sectors experience direct technology transfers from upstream wholly foreign owned investors. Spillovers from FDI through backward linkages are also detected but only when competition from imported intermediates is controlled for and are associated with innovations and technology investments made by firms.

Keywords: Foreign direct investment; productivity spillovers; technology transfers; absorptive capacity; Vietnam (search for similar items in EconPapers)
JEL-codes: D22 F21 O12 O3 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2014-01
New Economics Papers: this item is included in nep-int, nep-sbm, nep-sea and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:iis:dispap:iiisdp440

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