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Estimation results of FDI impact on labor productivity of domestic enterprises, using the variable Share
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Although decentralised governance has been one of the most salient political regimes worldwide over the past few decades, many countries have started to realise various shortcomings associated with their decentralisation process. As a consequence, a number of central governments have attempted to pursue recentralisation reforms in order to reclaim...
This study examines the asymmetric effects of exchange rate on Vietnam’s trade balance. Data used in this study consist of monthly trade balance, exchange rate, industrial production index and foreign direct investment series over the period from January 2010 to June 2020. Using the nonlinear autoregressive distributed lag (ARDL) bounds testing app...
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... The majority of the early evidence is negative (Aitken & Harrison, 1999;Bournakis et al., 2022;Djankov & Hoekman, 2000;Huynh et al., 2021). On the contrary, FDI is regarded as a catalyst for economic growth (see, Behera, 2017;Damijan et al., 2003;Fatima, 2016;G€ org & Greenaway, 2004;Harris & Robinson, 2003;He et al., 2019;Kayani et al., 2021;Liu, 2002;Nguyen, 2022). Additionally, FDI has admitted to being one of the primary means of disseminating information internationally. ...
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This study contributes to extending recent empirical literature on the possibility of spillovers in the Indonesian automotive industry not only from foreign firms within the industry, but also from potential externalities arising from downstream and upstream markets using stochastic frontier analysis (SFA). Generally, studies on FDI spillovers examine the role of FDI in explaining the efficiency differences measured by the distance to the frontier; however, few studies consider the impact of efficiency improvement and technological progress on productivity gains from FDI. This study attempts to capture the sources of productivity gains through both channels. The other studies have never discussed, based on author knowledge, the impact of spillovers regarding domestic firms’ specific market concentration as competitors, buyers, or sellers to foreign firms on efficiency and productivity.This study aims to fill this gap and analyze the importance of market characteristics in determining spillovers, VTI, trade openness, and foreign ownership. Previous studies on market concentration employ the Herfindahl-Hirschman Index (HHI), while this study utilizes the relative entropy coefficient (RE) to provide another approach to measure market concentration.In this study, the industry-specific characteristic is controlled using the inclusion of firm size and industrial dummy variables. The SFA estimation results are calculated to measure output elasticity with respect to each input and total factor productivity (TFP) growth. The discussion provides TFP decompositions, which are technical efficiency change (TEC), technological progress (TC), and scale efficiency change (SEC).
... Foreign investment accentuates the economic growth of economies experiencing limited domestic investment (Nguyen, 2022;Wang et al., 2022). Considering the relatively free flow of capital in the 21st century, economies have exploited the use of foreign investment in various forms. ...
... The authors also explained why foreign entities usually invested to countries to which they possessed higher monopolistic advantages, say, the abilities to produce similar but not perfect substitute of a product, to weaken local competition. In Vietnam, Nguyen (2022) studied the long-run effects of FDI to the country, claiming a possibility that FDI encourages economic growth in the shortrun, yet impedes the long runs, for the capital invested to the country has been found at environmentally adverse sectors such as heavy industry, chemicals, and those without beneficial technology transfer. ...
The paper investigates the mediating relationship between Trade and National Productivity, proxied by economic growth rate in ASEAN from 2012 – 2021. Using data from the ASEAN Statistical Yearbook, this research, first, reinvigorates the positive effects of trade balance on national productivity to improve the international trade literature given new settings and contemporary contexts, second, examines the translating/mediating effects of trade towards economic performance in the ASEAN by a novel approach through the adoption of generalized least squares and structural equation models. Findings show that there is a positive correlation between FDI and economic growth, a negative between trade openness and economic growth. Interestingly, there is the mediating effects of trade towards the FDI-growth relationship, justified by the tremendous uplift after the presence of trade was conducted into the regression. Albeit found compatible, the paper constrains itself since it did not treat the confounding effects of local market characteristics such as governance structures, institutional quality, intervention of fiscal policies, and the monetary circulation as one of the internal factors; to which the present author humbly suggests for future studies. Moreover, because of data unavailability, hypotheses are tested over the 10-year span, which may impede the inference because of macroeconomic-level policy lags.
... In such a context, in 1987, Vietnam adapted an approach to make FDI a key component of its development plan. Besides, in 2006, Vietnam started to assign comprehensive decentralization of licensing and management of foreign investment activities to local authorities (Nguyen, 2022). After 30 years of renovation and opening up, more than USD 182 billion of FDI has been invested in Vietnam. ...
This article aims to analyse the role of FDI and institutional quality in local economic growth in Vietnam. Using a dataset of 63 provinces in Vietnam between 2005 and 2020, the result of the Bayesian linear regression (BLR) method shows that FDI has a negative effect on economic growth, while provinces have a negative effect on economic growth. High institutional quality (IQ) leads to high economic growth. Besides, the result of the article also shows that the interaction between FDI flows, and institutional quality (FDIxIQ variable) positively impacts the economic growth of provinces in Vietnam. This implies that localities with good institutional quality will absorb FDI better. These findings suggest that policymakers should pay more attention to policies to attract FDI and improve institutional quality to promote sustainable GDP growth in the localities of Vietnam, thereby promoting the overall economic growth of Vietnam.
... In the fragile group, however, the long and short-term impacts of FDI on growth are negligible. Nguyen (2022) assesses how FDI affected the economic growth of Vietnam between 1990 to 2020 following the country's economic and political reforms (Doi Moi) in 1986. To test the impact of FDI on the growth of the economy, the study used the VAR model through unit root tests, Granger causality, impulse response, and variance decompositions. ...
This study investigates the impact of institutional quality and foreign direct investment (FDI) on the economic growth of South Asia from 1996 to 2021. The analysis employs various statistical techniques, including panel unit root testing, panel cointegration testing, and Panel Autoregressive Distributive Lag (PARDL) models, to gain insights into the region's economic development. For finding the association between institutional quality, FDI, domestic investment and economic growth in South Asia, first tried to check the unit root problem in the selected series by employing the panel unit testing and results of these tests conclude that some variables are integrated at level while some other variables are integrated at the first difference, so for testing the cointegration or long-run relations among these variable the panel cointegration tests are employed and these tests conclude the long-run association among the variables. For checking the long and short-run impact of institutional quality, FDI, domestic investment and economic growth the panel ARDL test is employed. The results demonstrate the significant positive long and short-run impact of institutional quality, FDI, domestic investment on economic growth in the region of South Asia. These relationships demonstrate the persistent nature of interactions among these variables, emphasizing the importance of policies that promote strong institutions, attract foreign investments, and stimulate domestic capital formation to sustain regional economic growth. The study offers critical recommendations for South Asian countries to enhance their economic growth by focusing on the strengthening institutional quality, encouraging FDI, developing the special economic zones, promoting domestic investment, investing in the infrastructure and promoting regional economic integration. These recommendations offer a clear path for South Asian countries to achieve sustained economic growth by addressing the interplay between institutional quality, FDI and domestic investment dynamics. By implementing these measures, South Asia can secure lasting prosperity and enhance the well-being of its people in a rapidly evolving global economic landscape.
... They emphasize competitive advantages to make regions more attractive and prevent degenerative processes [8,9]. The economic changes impact pre- [10,11] and post- [12][13][14][15] project assessment, based on the development planning, which is decided by the synergy generated by the project network structure, and determines the efficiency of this program [16]. Foreign Direct Investment (FDI) has been identified as a significant influence on spatial development in emerging economies [9,[17][18][19]. ...
Spatial restructuring and regional economic development are closely associated with sustainability. Despite the considerable literature on urbanization’s impact on sustainable economic development and urban expansion, few studies have explored how FDI-led spatial restructuring affects the sustainability from a local people perspective. To fill this gap, in-depth interviews were conducted with 516 residents of Aras special economic zones in Iran to assess the impacts and responses to economic shifts and spatial restructuring resulting from the Belt and Road Initiative since 2013. Using the DPSIR framework and sustainability index as an evaluation tool, we assessed the degree of sustainability and viable uplift at the regional level. The Genetic Algorithm (GA) was also utilized to determine optimal values based on local approaches. Results indicate that regional heterogeneity, excessive state pressure, and development imbalances impact the study area. The findings enrich the theory of sustainability and can guide the formulation of spatial restructuring, decision-making, and policies at different stages of regional development. In addition to financial progress, people-centered development planning using local approaches should be a component of the development of special economic zones.
... With the arrival of globalization, financial markets have become increasingly interconnected. This situation has led to substantial benefits due to higher capital circulation from countries with excess savings to countries with a deficit of funds, generating economic growth Bernanke et al. (2011); Matsumoto (2022); Nguyen (2022). However, it also has presented some new challenges for the global economy. ...
Volatility in international oil markets is a recurrent phenomenon which causes spillovers on financial markets. However, a bidirectional comparison between the dynamic behavior of economic and financial crises has not been documented yet. This paper addresses this research question by employing a combined GARCH-VAR-Spillover Index methodology to measure the volatility of the WTI and the Brent in order to analyze its relationship with the SP500, NASDAQ, DAX and the IBEX for a sample corresponding to the period [2000:01, 2021:04]. Specifically, this paper compares the dynamic behavior of spillovers during the 2007-2009 financial crisis (taken as the financial crisis) and the COVID-19 pandemic (taken as the economic crisis). It has been found that there exists statistically significant net volatility shocks and spillovers from oil to stocks markets in the majority of cases and periods. These spillovers are bidirectional, and the net relationship is reversed depending on the market and the time period. The dynamic behavior of such spillovers depends on the region, being the USA more reactive to the source of the crisis than Europe. In particular, in the USA when the crisis is originated by financial shocks, financial markets are net transmitters of volatility to oil markets. When the source of the shock is economic, oil markets are net transmitters of volatility to stocks markets. This is not the case for Europe, where financial markets seem to be either transmitters or receivers of volatility no matter the source of the shock. In general, our study offers new evidence to understand macro-financial linkages.
... There are many issues that are associated with M&A which impact businesses negatively such as lack of good motivations for acquisitions, overestimated synergies, targeting wrong companies for merging, losing trust from the stakeholders, failures in integration and many others. Evaluating with appropriate companies is an important factor and if one company merged with the wrong companies it impacts their financial performances negatively and both organisations face challenging situations and failures [18]. Apart from this, language is a big barrier when merging with other organisations from all around the whole world and also different cultures of different organisations create conflictual situations between two organisations. ...
In today's corporate world, the procedure of “mergers and acquisitions (M&A)” has occupied a remarkable significance. Basically, this method is utilising in this current business process in a vast range for developing profitability and revenues to rebuild the business organisation. The main purpose of this study is to anlayse the role and impact of mergers and acquisition on financial performance. In this context, some financial indicators such as credit risk, liquidity, asset profile, cost control ratios, and capital structure is important key tools. All these financial indicators are withdrawn from the “audited financial reports” of different years. The role of mergers and acquisitions depends on the performance capability of the employees and the relationship between managers and employees. In this study “secondary data” has been used to generate a valuable and reliable outcome to draw the conclusion. Thus, effective research tools have helped the researcher to set the path of research and get the right information related to the research topic. All the issues related to mergers and acquisitions and using strategies to lead financial performance have been mentioned to understand the role of in a perfect way. Finally, the result highlighted that mergers and acquisitions can have a remarkable effect on the financial performance of an individual organisation. Keywords : acquisitions, corporate strategy, financial performance, finance, mergers.
... Religious-inspired biases and preferences can seek an optimum person for developing a firm's deals. Understanding the financial decision-making range and its resources regarding the economical performance range can provide an optimum choice of an organization's range [18]. Organizing customers' performance range and celebration of religious beliefs can provide direct benefits in this aspect. ...
Present investigative study is an endeavor to understand the effect of religious value and performance on the financial investment-related decision-making process within developing countries. This study uses an interpretivism research philosophy along with an indicative research approach for gaining in-depth insight into the present research problem. A total of 6 months are allocated for the effective completion of the entire project. Only secondary qualitative data is used for the development of the entire research project. Only thematic analysis is done on the available data set for understanding the effect of religious performance on the investment-related financial decision-making process within developing countries. The result of the thematic analysis stated that the specific religious values and norms restricted certain purchase behavior which directed the financial growth of the country in an effective manner. On the other hand, the economic decision-making process is highly influenced by the spiritual beliefs of an individual which leads to investment pattern determination. It is also noted that Christians save more household expenditures than their non-christian counterpart. According to the thematic analysis, it is clear that religious performance effectively influences financial investment-related decisions. In the historical period, the occurrence of this matter is higher than the modern time. Keywords : Ethical values, financial performance range, Gross Domestic Product or GDP, Religious belief, religious restriction, norm.
... In the case of Vietnam, by 2015, Japan was the second largest source of FDI (GSO, 1996(GSO, , 2015, yet 38% and 65.2% of Japanese enterprises regard the quality of human resources and the ability of local suppliers to provide raw materials, respectively, to be major constraints on the efficiency of their operations in Vietnam (JETRO, 2016). In 2018, Japanese FDI in Vietnam reached US$8.59 billion, accounting for about 24% of the total (VIR, 2019). 1 The way that shortages of skilled labor and technology gaps hinder spill overs in Vietnam is addressed by Nguyen, Vu, Tran, and Nguyen (2006), whose results show that, when trade is expanded, the impact of FDI on economic growth through technology diffusion or human capital is ambiguous. ...
... Le (2002) examines the FDI-growth nexus for 1986 to 2002, finding a significantly positive impact of FDI on growth. In contrast, Nguyen et al. (2006) argue that the technological gap and the lack of linkage between local and foreign companies hinder FDI spill overs. Vu (2008) investigates the indirect effects of FDI on economic growth in 11 economic sectors from 1988 to 2002, and notes varying results by sector; for example, FDI inflows to construction and transportation have a negative impact on growth, while FDI inflows to industry and real estate have a positive effect. ...
... Many of the studies on Vietnam do not consider the role of trade openness, although De Mello Jr (1997) and Batten and Vo (2009) note the trade openness of host countries is an important factor in attracting FDI and Nguyen et al. (2006) mention the possibility of attracting FDI due to Vietnam's trade policy liberalization. In terms of cross-section estimation, if the instrumental variables are not appropriate, the method can fail to pick up the impact of FDI (Nair-Reichert and Weinhold, 2001). ...
Using data over the period 1986 to 2020 and employing the Auto Regressive Distributed Lag bounds testing technique, we examine the linkages amongst economic growth, foreign direct investment (FDI), exports, and imports in Vietnam. The ARDL technique is particularly well-suited in the presence of a mixture of stationary and non-stationary variables. We find a long-run relationship indicating that FDI strongly promotes economic growth, but exports and imports do not have a statistically significant impact on growth. The robustness of these results is confirmed by a range of diagnostic tests and alternative methods of estimation. Additionally, the vector error correction model reveals that, in the short-run, both imports and exports have bidirectional Granger causality with FDI, while FDI has bidirectional Granger causality with economic growth in the long-run. Our findings suggest some policies to develop FDI to bolster economic growth.
