Do Direct Foreign Investments Increase Efficiency Convergence at Firm Level? The Case of Vietnam, 2000-2011
Keywords:Stochastic production frontier, efficiency, Foreign direct investment Manufacturing, efficiency Convergence
AbstractThe objective of this study is to assess the extent to which the effect of FDI on firms’ efficiency and efficiency convergence across industries in Vietnam. Dynamic input output tables are used to construct the linkages between domestic and foreign firms. Stochastic production frontier is used to estimate firms ‘efficiency with a large panel dataset covering manufacturing firms in Vietnam from 2000 to 2011. The analysis shows that, the impact of FDI on domestic firms ‘efficiency score and convergence at firms’ level through the horizontal, backward and supply backward channels are negative and different.
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