Examining FDI Spillover Effects on Productivity Growth: Firm-Level Evidence from Vietnam

Abstract

The relationship between foreign direct investment (FDI) and firm productivity still greatly concerns many researchers. Even though this topic has provided rich insight into the impacts of FDI spillovers, limited empirical research has been conducted to figure out the heterogeneous impact of such spillovers in the case of Vietnam. In this study, which employs the generalized methods of moments to investigate a sample of 537,772 enterprises operating in Vietnam in the period from 2007 to 2015, we examine how spillovers occur and how they can affect domestic firms’ productivity. Intra-industrial and regional spillovers impact negatively on the productivity of domestic firms. Regarding intra-industrial spillovers, only backward ones positively affect local productivity