Spatial Spillovers of Foreign Direct Investment: The Case of Vietnam

Thang Tran and Thi Song Hanh Pham ()
Additional contact information
Thi Song Hanh Pham: Sheffield Business School, Sheffield Hallam University

No 12, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: In an effort to unlock the black box of mixed empirical evidence for productivity spillovers from foreign direct investment in host countries, this paper, using the case of Vietnam, examined the role of geographical proximity and inter firm interaction in determining productivity spillovers of FDI. The spatial productivity model specified based on the empirical spillovers literature and spatial econometric model. This paper confirms negative effect of horizontal spillovers. The distance and interaction are confirmed to be two determinants of the significance of spillover effects. The paper finds the positive backward and negative forward spillovers. Indirect effect (or the inter-regional spillovers) is found about twice to four times higher than the direct effect (or the intra-regional spillovers) but such kind of indirect effect is quickly attenuated for a certain distance. The paper also finds the evidence of the effect arising from the social interaction among local firms in productivity spillovers. The testing results suggest that local firm's productivity is substantially driven by the agglomeration effect and the presence of interand intra-regional FDI.

Pages: 32 pages
Date: 2013
New Economics Papers: this item is included in nep-cse, nep-eff, nep-geo, nep-sea, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://depocenwp.org/modules/download/index.php?id=162 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dpc:wpaper:1213

Access Statistics for this paper

More papers in Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam Contact information at EDIRC.
Bibliographic data for series maintained by Doan Quang Hung ().