Do Direct Foreign Investments Increase Efficiency Convergence at Firm Level? The Case of Vietnam, 2000-2011


  • Nguyen Khac Minh Member of the scientific council, National Economics University (NEU), 207 Giai Phong Street, Hai Ba Trung District, Hanoi, Vietnam. The Department of Economics, Water Resources University, 175 Tayson Street, Dong Da District, Hanoi, Vietnam
  • Nguyen Viet Hung Faculty of Economics, National Economics University (NEU), 207 Giai Phong Street, Hai Ba Trung District, Hanoi, Vietnam
  • Ha Quynh Hoa Faculty of Economics, National Economics University (NEU), 207 Giai Phong Street, Hai Ba Trung District, Hanoi, Vietnam
  • Pham Van Khanh Faculty of Information Technology, Military Technical Academy (MTA), 236 Hoang Quoc Viet Street, Cau Giay District, Hanoi, Vietnam



Stochastic production frontier, efficiency, Foreign direct investment Manufacturing, efficiency Convergence


The 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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