Impacts of FDI Linkages on the Labor Productivity of Domestic Firms: The Role of Local Business Environment
This study contributes to the literature on the spillovers of foreign direct investment by presenting empirical evidence on the impact of linkages with foreign-invested firms on the productivity of domestic firms in different local business environments. Using longitudinal data in a transitional eco...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
SAGE Publishing
2025-08-01
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| Series: | SAGE Open |
| Online Access: | https://doi.org/10.1177/21582440251362392 |
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| Summary: | This study contributes to the literature on the spillovers of foreign direct investment by presenting empirical evidence on the impact of linkages with foreign-invested firms on the productivity of domestic firms in different local business environments. Using longitudinal data in a transitional economy of Vietnam from 2012 to 2018 and applying different estimation techniques to deal with the potential endogeneity problem, the study shows that linkages with foreign-invested firms have a positive impact on the labor productivity of domestic firms. This relationship is significantly enhanced in an improved local business environment. Additionally, this enhancement effect is observed among firms with a smaller size and those operating in medium- and high-technology industries. The findings suggest important implications to support businesses through improving the local business environment in transition economies. |
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| ISSN: | 2158-2440 |