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Does foreign investment enhance domestic manufacturing firms’ labour productivity? Evidence from a quantile regression approach

Author

Listed:
  • Van Thi Cam Ha

    (University of Waikato
    Thuongmai University)

  • Mark Holmes

    (University of Waikato)

  • Tinh Doan

    (Australian National University)

  • Gazi Hassan

    (University of Waikato)

Abstract

We provide new insights into the relationship between foreign investment and the labour productivity of domestic firms in the Vietnamese manufacturing industry. Using quantile regression analysis of a panel of firm-level data over a 2010–2015 study period, we find that the presence of foreign investment has a positive impact on domestic firm labour productivity through competition effects within the industry at the middle and high quantiles. We do not find significant evidence to support a positive relationship between foreign investment in downstream sectors and domestic firm labour productivity in upstream sectors, however. There are some indications that suggest a positive relationship between foreign suppliers in upstream sectors and labour productivity of domestic buyers in downstream sectors at the low and middle quantiles.

Suggested Citation

  • Van Thi Cam Ha & Mark Holmes & Tinh Doan & Gazi Hassan, 2021. "Does foreign investment enhance domestic manufacturing firms’ labour productivity? Evidence from a quantile regression approach," Economic Change and Restructuring, Springer, vol. 54(3), pages 637-654, August.
    • Handle: RePEc:kap:ecopln:v:54:y:2021:i:3:d:10.1007_s10644-019-09251-x
    DOI: 10.1007/s10644-019-09251-x
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    More about this item

    Keywords

    Labour productivity; Foreign investment spillovers; Quantile regression;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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