Technology spillovers in the electronics and mechanical industries: the roles of ownership structure and wage and training costs in Vietnam
by Phuong V. Nguyen; Khoa T. Tran; Hanh Canh Phuong Le; Hoa Doan Xuan Trieu; Hien Thi Ngoc Huynh
J. for Global Business Advancement (JGBA), Vol. 12, No. 2, 2019

Abstract: Few studies have investigated the impacts of foreign direct investment (FDI) on technology transfer in specific industries of the host country. This paper addresses this gap using firm-level panel data obtained from the General Statistics Office of Vietnam to examine the magnitude of technology spillovers from FDI in Vietnam's electronics and mechanical industries during the 2007-2015 period. The findings reveal positive and significant backward spillover, with no evidence for horizontal linkage. Firms with lower wage and training costs received greater beneficial spillover in terms of backward linkages than firms with higher costs. The positive and significant impact of vertical spillovers was greatest for fully foreign-owned firms, while no impact was found for joint stock firms. Furthermore, forward spillover occurred in state-owned enterprises. Finally, private firms were least likely to reap beneficial technology transfers from FDI. These findings imply that the wide technology gap in Vietnam hinders benefits from FDI spillovers.

Online publication date: Wed, 17-Jul-2019

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