Foreign direct investment in Vietnam: Is there any evidence of technological spillover effects

Anh Nguyen (), Thang Nguyen, Dang Trung Le, Pham Ngoc, Chuc Nguyen and Duc Nhat Nguyen

MPRA Paper from University Library of Munich, Germany

Abstract: In the context of integrating more deeply into the world economy the Vietnamese policy makers have undertaken several measures to attract foreign direct investment to the country, with the culmination of FDI inflows in 2007 reaching over USD 20 billion, an increase of 69% over 2006. The policy has been taken on the ground that the FDI inflows will create employment and bring along the much needed technological advances, which will spill over to domestic firms. In this paper, we use a firm-level panel data constructed from the Census 2000-2005 to investigate not only the horizontal spillovers but also the backward and forward linkages. Adding to the current literature which focused mainly on the spillovers in the manufacturing sector, our paper provide the first estimates of the spillover effects in the service sector (at least in the context of developing countries). We also distinguish between the horizontal output spillovers (which capture demonstration effects and competition effects) and the horizontal employment spillover (which captures the labour mobility effect). The results obtained from our regression models are mixed. Different channels of spillovers are at work for the manufacturing and the service sectors. We find evidence of the positive backward technological spillovers for the manufacturing and positive horizontal spillovers for the service sector.

Keywords: Foreign Direct Investment; Vietnam; technological spillovers (search for similar items in EconPapers)
JEL-codes: D24 F15 F23 (search for similar items in EconPapers)
Date: 2008-01-01
New Economics Papers: this item is included in nep-dev and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Working Paper: Foreign Direct Investment in Vietnam: Is There Any Evidence Of Technological Spillover Effects (2008)
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