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What makes linkages "good" linkages? Firms, the investment climate and business support services in Vietnam

Chiara Franco, Marco Sanfilippo () and Adnan Seric ()

No 2015.09, IOB Working Papers from Universiteit Antwerpen, Institute of Development Policy (IOB)

Abstract: The role of backward linkages between foreign and local firms is considered as a crucial factor to favour the economic development of a country. This work tries to unveil its different dimensions with respect to the Vietnamese case. We develop our research questions in two steps. We first analyse what are the determinants of linkages, looking at both their extent and the capacity to set up a local supply chain. Then, we provide empirical evidence for the probability of linkages to be vehicles to enhance local firm’s capacity to benefit from FDI. Our main findings reveal that firm specific factors affect mainly the size of linkages, while it is the provision of key business support services to investors to determine the probability for linkages to become “good” linkages.

Keywords: FDI; linkages; business climate; Vietnam (search for similar items in EconPapers)
JEL-codes: F45 O19 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-sea and nep-tra
Date: 2015-12
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