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Does foreign investment enhance domestic manufacturing firms’ labour productivity? Evidence from a quantile regression approach

Ha Van Thi Cam, Mark Holmes (), Tinh Doan and Gazi Hassan ()
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Ha Van Thi Cam: University of Waikato

Economic Change and Restructuring, 2021, vol. 54, issue 3, No 2, 637-654

Abstract: Abstract We provide new insights into the relationship between foreign investment and the labour productivity of domestic firms in the Vietnamese manufacturing industry. Using quantile regression analysis of a panel of firm-level data over a 2010–2015 study period, we find that the presence of foreign investment has a positive impact on domestic firm labour productivity through competition effects within the industry at the middle and high quantiles. We do not find significant evidence to support a positive relationship between foreign investment in downstream sectors and domestic firm labour productivity in upstream sectors, however. There are some indications that suggest a positive relationship between foreign suppliers in upstream sectors and labour productivity of domestic buyers in downstream sectors at the low and middle quantiles.

Keywords: Labour productivity; Foreign investment spillovers; Quantile regression (search for similar items in EconPapers)
JEL-codes: D22 F21 F23 O12 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10644-019-09251-x

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