Cost-benefit Analysis of FDI: FDI Barriers and Firm Internal Capabilities

Abstract

We conduct this study to make an assessment on FDI, its benefit and connection with firm internal capabilities in Vietnam case. Methods we use include: qualitative analysis with statistics and data processing. Also, we used qualitative analysis to make policy suggestions with synthesis and inductive methods. We analyze the research based on five dimensions: corporate governance capacities, human resources, finance, technology, and supply. Research results show us that the five dimensions together with viewpoints from experts are quite suitable for our conducted experimental research, esp. To express the connection between local firms, national firms and foreign investment firms. Also we assess FDI based on an approach of cost-benefit analysis including FDI barriers and firm internal capabilities. Through a survey of 55 managers of FDI enterprises in Viet-Sing industrial park, the results show that enterprises here only face three difficulties in terms of costs of labor, water and energy supply, and governance and hostile regulations. This study makes a small contribution to FDI barrier theory through empirical evidence from an industrial park in a developing country, Vietnam. Then we can make policy implications and our study limitation is that we can expand for other market.