PUBLICATIONS & REPORTS

PUBLICATIONS & REPORTS

Productivity spillovers from foreign multinationals and trade policy: firm-level analysis of Vietnamese manufacturing

Author Truong Thi Ngoc Thuyen, Juthathip Jongwanich, Eric D. Ramstetter
Date of Publication 2014. 6
No. 2014-10
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Contents Introduction

This article examines how the presence of foreign multinational enterprises (MNEs) affects productivity in local firms in Vietnamese manufacturing in 2005-2010. The paper also emphasizes how import protection has affected these productivity spillovers and how spillovers from wholly-foreign MNEs and joint ventures differ. The most consistent result suggests wholly-foreign MNEs impart negative spillovers while joint ventures generate positive spillovers. Theory and random effects estimates also indicate that import protection reduces local firm productivity and weakens the effect of spillovers from all MNEs, but this result is not obtained when a fixed effects estimator is used. Results are similar in samples of labour-intensive industries, which include close to three-fourths of all sample firms, but differ markedly for more capital-intensive groups.