IDEAS home Printed from https://ideas.repec.org/a/mir/mirbus/v4y2014i7p109-119.html
   My bibliography  Save this article

Do Direct Foreign Investments Increase Efficiency Convergence at Firm Level? The Case of Vietnam, 2000-2011

Author

Listed:
  • Nguyen Khac Minh

    (Member of the scientific council, National Economics University (NEU), 207 Giai Phong Street, Hai Ba Trung District, Hanoi, Vietnam.)

  • Nguyen Viet Hung

    (Faculty of Economics, National Economics University (NEU), 207 Giai Phong Street, Hai Ba Trung District, Hanoi, Vietnam,)

  • Pham Van Khanh

    (Faculty of Information Technology, Military Technical Academy (MTA), 236 Hoang Quoc Viet Street, Cau Giay District, Hanoi, Vietnam,)

  • Ha Quynh Hoa

    (Faculty of Economics, National Economics University (NEU), 207 Giai Phong Street, Hai Ba Trung District, Hanoi, Vietnam,)

Abstract

The objective of this study is to assess the extent to which the effect of FDI on firms’ efficiency and efficiency convergence across industries in Vietnam. Dynamic input output tables are used to construct the linkages between domestic and foreign firms. Stochastic production frontier is used to estimate firms ‘efficiency with a large panel dataset covering manufacturing firms in Vietnam from 2000 to 2011. The analysis shows that, the impact of FDI on domestic firms ‘efficiency score and convergence at firms’ level through the horizontal, backward and supply backward channels are negative and different.

Suggested Citation

  • Nguyen Khac Minh & Nguyen Viet Hung & Pham Van Khanh & Ha Quynh Hoa, 2014. "Do Direct Foreign Investments Increase Efficiency Convergence at Firm Level? The Case of Vietnam, 2000-2011," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(7), pages 109-119, July.
    • Handle: RePEc:mir:mirbus:v:4:y:2014:i:7:p:109-119
    as

    Download full text from publisher

    File URL: http://thejournalofbusiness.org/index.php/site/article/view/554/442
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gong, Byeong-Ho & Sickles, Robin C., 1992. "Finite sample evidence on the performance of stochastic frontiers and data envelopment analysis using panel data," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 259-284.
    2. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
    3. Dollar, David & Wolff, Edward N, 1988. "Convergence of Industry Labor Productivity among Advanced Economies, 1963-1982," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 549-558, November.
    4. Vinish Kathuria, 2000. "Productivity spillovers from technology transfer to Indian manufacturing firms," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 343-369, April.
    5. Dominique Deprins & Léopold Simar & Henry Tulkens, 2006. "Measuring Labor-Efficiency in Post Offices," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 285-309, Springer.
    6. Sofiane Ghali & Sami Rezgui, 2008. "FDI Contribution to Technical Efficiency in the Tunisian Manufacturing Sector," Working Papers 421, Economic Research Forum, revised 06 Jan 2008.
    7. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    8. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
    9. Dowrick, Steve & Nguyen, Duc-Tho, 1989. "OECD Comparative Economic Growth 1950-85: Catch-Up and Convergence," American Economic Review, American Economic Association, vol. 79(5), pages 1010-1030, December.
    10. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-1238, December.
    11. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    12. Alam, Ila M Semenick & Sickles, Robin C, 2000. "Time Series Analysis of Deregulatory Dynamics and Technical Efficiency: The Case of the U.S. Airline Industry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 203-218, February.
    13. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    14. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    15. Yih-Chyi Chuang & Chi-Mei Lin, 1999. "Foreign direct investment, R&D and spillover efficiency: Evidence from Taiwan's manufacturing firms," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 117-137.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thanh Tam Nguyen-Huu & Minh Nguyen-Khac & Quoc Tran-Nam, 2017. "The role of environmental regulations and innovation in TFP convergence: Evidence from manufacturing SMEs in Vietnam," WIDER Working Paper Series 092, World Institute for Development Economic Research (UNU-WIDER).
    2. Thanh Tam Nguyen-Huu & Minh Nguyen-Khac & Quoc Tran-Nam, 2017. "The role of environmental regulations and innovation in TFP convergence: Evidence from manufacturing SMEs in Vietnam," WIDER Working Paper Series wp-2017-92, World Institute for Development Economic Research (UNU-WIDER).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nguyen Khac Minh & Nguyen Viet Hung & Pham Van Khanh & Ha Quynh Hoa, 2014. "Do Direct Foreign Investments Increase Efficiency Convergence at Firm Level? The Case of Vietnam, 2000-2011," International Journal of Business and Social Research, LAR Center Press, vol. 4(7), pages 109-119, July.
    2. Sofiane Ghali & Sami Rezgui, 2008. "FDI Contribution to Technical Efficiency in the Tunisian Manufacturing Sector," Working Papers 421, Economic Research Forum, revised 06 Jan 2008.
    3. Sickles, Robin C., 2005. "Panel estimators and the identification of firm-specific efficiency levels in parametric, semiparametric and nonparametric settings," Journal of Econometrics, Elsevier, vol. 126(2), pages 305-334, June.
    4. repec:use:tkiwps:3232 is not listed on IDEAS
    5. Kiyohiko G. Nishimura & Takanobu Nakajima & Kozo Kiyota, 2005. "Productivity Convergence at the Firm Level," CIRJE F-Series CIRJE-F-341, CIRJE, Faculty of Economics, University of Tokyo.
    6. Blomström, Magnus & Kokko, Ari, 2003. "The Economics of Foreign Direct Investment Incentives," EIJS Working Paper Series 168, Stockholm School of Economics, The European Institute of Japanese Studies.
    7. Sickles, Robin C. & Streitwieser, Mary L., 1989. "Technical Inefficiency And Productive Decline In The U.S. Interstate Natural Gas Pipline Industry Under The Natural Gas Policy Act," Working Papers 89-20, C.V. Starr Center for Applied Economics, New York University.
    8. Zhang, Qizheng & Qian, Zesen & Wang, Shuo & Yuan, Lingran & Gong, Binlei, 2022. "Productivity drain or productivity gain? The effect of new technology adoption in the oilfield market," Energy Economics, Elsevier, vol. 108(C).
    9. Emilie Caldeira & Alou Adessé Dama & Ali Compaoré & Mario Mansour & Grégoire Rota-Graziosi, 2020. "Tax effort in Sub-Saharan African countries : evidence from a new dataset," Working Papers hal-02543162, HAL.
    10. Sickles, Robin C. & Song, Wonho & Zelenyuk, Valentin, 2018. "Econometric Analysis of Productivity: Theory and Implementation in R," Working Papers 18-008, Rice University, Department of Economics.
    11. Neil Foster-McGregor, 2012. "Innovation and Technology Transfer across Countries," wiiw Research Reports 380, The Vienna Institute for International Economic Studies, wiiw.
    12. Munir Ahmad & Azkar Ahmad, 1998. "An Analysis of the Sources of Wheat Output Growth in the Barani Area of the Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(3), pages 231-249.
    13. Meryem Duygun & Jiaqi Hao & Anders Isaksson & Robin C. Sickles, 2017. "World Productivity Growth: A Model Averaging Approach," Pacific Economic Review, Wiley Blackwell, vol. 22(4), pages 587-619, October.
    14. Lahcen Achy & Samy Ben Naceur & Adel Ben Youssef & Samir Ghazouani, 2010. "Restructuring and Efficiency in the Manufacturing Sector: A Firm Level Approach Applied to Morocco," Working Papers 565, Economic Research Forum, revised 11 Jan 2010.
    15. Robin C. Sickles & Jiaqi Hao & Chenjun Shang, 2014. "Panel data and productivity measurement: an analysis of Asian productivity trends," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 12(3), pages 211-231, August.
    16. Giannis Karagiannis & Vangelis Tzouvelekas, 1999. "Measuring Technical Efficiency with Panel Data: Results from Competing Models," Working Papers 9914, University of Crete, Department of Economics.
    17. Collier, Trevor & Johnson, Andrew L. & Ruggiero, John, 2011. "Technical efficiency estimation with multiple inputs and multiple outputs using regression analysis," European Journal of Operational Research, Elsevier, vol. 208(2), pages 153-160, January.
    18. Yang Li & Shin-Yi Chen, 2010. "The Impact of FDI on the Productivity of Chinese Economic Regions," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 17(3), pages 299-312.
    19. Sapienza, Elvira, 2010. "FDI and Growth in Eastern Europe: A Sectoral Analysis - Investimenti diretti e crescita in est-Europa: un’analisi settoriale," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(4), pages 451-475.
    20. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 245-276.
    21. Luis R Murillo-Zamorano, "undated". "Total Factor Productivity Growth, Technical Efficiency Change and Energy Input. An International Frontier Analysis," Discussion Papers 03/09, Department of Economics, University of York.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mir:mirbus:v:4:y:2014:i:7:p:109-119. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: M Kabir (email available below). General contact details of provider: https://edirc.repec.org/data/csmirus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.