Firm Export and the Impact of Foreign Ownership in Vietnam: A Micro-Data Analysis

Abstract

This paper investigates the impact of foreign ownership on firm exports in Vietnam and analyzes how export participation and export intensity vary with ownership status by comparing Foreign Direct Investment enterprises (FDI enterprises) versus domestic firms, and wholly-foreign-owned enterprises (WFs) versus foreign joint ventures (JVs). Using data from 2010-2015 Vietnamese enterprise survey (VES), we document that after controlling for firm characteristics, industry and region, FDI enterprises have higher export participation and higher export intensity than local firms. The finding supports the hypothesis that FDI enterprises inherit from foreign firm competitive advantages and therefore become superior in exports. We also find that while export participation is similar between JVs and WFs, export intensity is significantly higher for WFs than for JVs. This suggests that export-oriented foreign investors tend to establish 100% foreign-owned companies to exploit advantages of labor costs or natural resources, while domestic-oriented firms tend to form joint venture to penetrate the domestic market.