International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

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 Volume 8, Issue 6 (June 2021), Pages: 94-102

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 Original Research Paper

 Title: Determinants of linkages between foreign direct investment firms and domestic firms in Vietnam

 Author(s): Dao Hoang Tuan *

 Affiliation(s):

 International School of Economics and Finance, Academy of Policy and Development, Hanoi, Vietnam

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 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0002-5785-3843

 Digital Object Identifier: 

 https://doi.org/10.21833/ijaas.2021.06.011

 Abstract:

Foreign direct investment (FDI) is an important sector of many developing economies in general and of Vietnam in particular. In Vietnam, the FDI sector contributed up to 27.7% of the average economic growth rate of 6.0% per year from 2010 to 2018. Besides this contribution, operations of FDI in Vietnam reveal many limitations, the most noticeable of which is the weak linkage between FDI and Vietnamese firms. This article examines determinants of FDI-domestic firms linkage in Vietnam. This research looks at all three types of linkage, including horizontal linkage, vertical linkage, and supply-backward linkage. Factors that have a positive impact on linkages are provincial economic growth, firms’ technology level, regional factors, being located in industrial zones, and operating in the manufacturing sector. Macroeconomic instability has a negative impact on linkage. The quality of economic governance, as measured by the Provincial Competitiveness Index, is important for attracting FDI, but does not affect linkages. 

 © 2021 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords: FDI, Linkage, Domestic firms

 Article History: Received 10 November 2020, Received in revised form 19 February 2021, Accepted 1 March 2021

 Acknowledgment 

No Acknowledgment.

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

  Tuan DH (2021). Determinants of linkages between foreign direct investment firms and domestic firms in Vietnam. International Journal of Advanced and Applied Sciences, 8(6): 94-102

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