Foreign Direct Investment and Export Spillovers: Evidence from Vietnam

Abstract

Through using firm level data for the manufacturing industries in Vietnam, the paper examines whether the presence of foreign firms influences the decision of domestic firms to export or not, and whether foreign firms influence the intensity of exports by domestic firms. In contrast with most previous studies, the paper focuses on the export spillovers from foreign direct investment (FDI) taking place through both horizontal and vertical linkages. Our findings show that horizontal and forward linkages are the two main channels of export spillovers from FDI while domestic firms have no benefits from backward linkages to enter the export markets as well as to increase their export value. Moreover, export oriented foreign firms are the unique source of export spillovers in Vietnam.