Intl Ivmt - G4 - DTUE.1 Presentation

8/12/2019 Intl Ivmt - G4 - DTUE.1 Presentation

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PRESENTED BY group 4

Foreign Direct Investment & Export

Spillovers:Evidence From Vietnam

International

Investment


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Introduction: Obectives

The existing International business literature suggests that the presense of foreign firms in a

country can benefit domestic firms through the formation of inter-firm linkages. These linkages

can take various forms. The objectives of this research is to examines the impact of horizontal

and vertical (backward and forward linkages (between domestic and foreign firms on!

!"# T$e decision o% domestic %irms to e&port

!'# T$e e&port s$are o% domestic %irm


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Introduction: %ocus

Vietnam - a country that has

attracted significant FDI since the

late 1908s !he introduction of

reform policy "no#n as Doi $oi in

198%& mar"ed the 'eginning of

opening up of the Vietnamese

economy #hich resulted in a

significant inflo# of foreign

investment

FDI has played an important role in

the rapid economic gro#th in

Vietnam

!he impact of FDI-related

industrial lin"ages on e(port

spillovers in Vietnam )n analysis

of the indirect effect of FDI on

Vietnam e(port performance

allo#s one to assess the

effectiveness of government

policies

Based on a large number o% t$e e&isting studies since '!!!( t$is paper clari%ied several important points and put%or)ard conclusions %or t$e issue *DI and e&port spillovers in +ietnam#


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T$eor. %rame)or/

".#. The presence of $%& and its impact on the host

countries

!"# E&plaining t$e impact o% 0N1s )it$ O-I and IDP %rame)or/s#

!'# T$e impact o% *DI on local %irms in developingcountries#

!2# T$e spreading e%%ect o% 0N1s in $ost countries#

".". The presence of $%&s in developingcountries can facilitate technology transfer from

developed to the developing countries.


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Emperical models 3ND data*mpirical model is 'ased on )it"en at al31995& 6reena#ay et al370045 and neller and +isu 37005 !he model

consists of t#o euations as a'ove:

Exportijt %5 1apital6 Intensit.it( 7uman61apitalit( Scaleit(1oncentrationt( Tec$nolog.68apit( *inancial6Developmentit(*DISpilloversit( 9it

Export_intensityijt g5 1apital6 Intensit.it( 7uman61apitalit( Scaleit(

1oncentrationt( Tec$nolog.68apit( *inancial6Developmentit(*DISpilloversit( ;it

;here:< Capital_ Intensityijtis capital stoc" per employee in million V.D at time t< Human_Capitalijt is measured 'y total #ages and training costs per employee in million V.D< Scaleijtis measured 'y sales of firm I relative to the average firm sales in the same sector< Technology_Gapijtis the percentage difference 'et#een the average productivity of foreign firm

and that of domestic firms in the same industry

< Concentrationijtis measured 'y means of the erfindahl inde( for domestic firms

< Financial_Developmentijtof firm I in industry = at time is measured 'y #or"ing capital as a

proportion of total assets

< FDISpilloversijtcan occur through hori>ontal and vertical lin"ages 'et#een domestic and foreignfirms


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Emperical models 3ND data

8eneral Statistics O%%ice o% +ietnam

T$e dataset is a cross


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Emperical results andanal.sis

< !he impact of hori>ontal lin"ages on the decision to e(port and e(port share is

< positive for 'oth private and state-o#ned firms

< 'ut the effect is highly significant only for state o#ned firms

< o#ever& state-o#ned firms do not gain any 'enefits from vertical lin"ages #ith

foreign firms #ith foreign firms

< +rivate firms are relatively more innovative and have 'etter access to gooduality intermediate inputs& #hich helps to reduce production costs )s a

result& private firms are a'le to increase their mar"et share too and gain 'enefits

through vertical lin"ages

T$e Impact o% *irm O)ners$ip and Industr.Structure on E&port Spillovers


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Emperical results andanal.sis

< !he presence of e(port-oriented foreign firms not only significantly increase

the pro'a'ility that domestic firms in the same industry #ill 'ecome involved

in e(porting 'ut it also leads a significant increase in their e(port intensity

< !he presence of domestic mar"et oriented foreign firms in V. has the

opposite effect

+resence of significant imitation and "no#ledge spillover effect among

V.?s manufacturing firms

Decrease the sun" costs associated #ith e(port activities

T$e Impacts o% t$e Presence o% bot$ E&portOriented and Domestic 0ar/et Oriented *oreign*irms on E&port Spillovers


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1onclusion

!he impact of vertical and hori>ontal

lin"ages 'et#een domestic and foreign

companies to e(plain:

< !he e(porting decision of domestic

companies

< *(porting shares of domestic

companies

!he impact of FDI on the economy of the

host country through direct and indirect

channels FDI is seen as a developing

mean of technology transfer It can 'oostproductivity and contri'ute significantly to

the development of production !he

presence of the foreign companies may

also affect the decision of domestic

companies as #ell as their e(porting

mar"et share

Issue " Issue '

This essay studies on " main issues!


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T73N@S *OR YO,R TI0E

INTERNTI!N" IN#EST$ENT % GR!&' (

)oreign *irect Investment + ,xport pillovers!

,vidence )rom ietnam

Intl Ivmt - G4 - DTUE.1 Presentation

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