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Foreign Direct Investment in Industrial Transition: The Experience of Vietnam

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  • Prema-chandra Athukorala

    ()

  • Tran Quang Tien

Abstract

This paper examines the role of foreign direct investment (FDI) in the process of industrial transition in Vietnam in the context of market-oriented reforms undertaken over the past two decades. The findings are consistent with the conventional wisdom that concomitant liberalization of trade and investment regimes, accompanied by creating a congenial environment for market-based decisions by the private agents, is vital for reaping developmental gains form FDI. During the 1990s growth of employment in foreign invested enterprises (FIEs) lagged behind output growth, reflecting the capitalintensity bias of production in a partially-liberalized economy. This pattern has changed notably in recent years as the reform process gained momentum. Of particular significance in this connection is the growing importance of assembly activities by FIEs in electronics and other high-tech industries.

Suggested Citation

  • Prema-chandra Athukorala & Tran Quang Tien, 2009. "Foreign Direct Investment in Industrial Transition: The Experience of Vietnam," Departmental Working Papers 2009-20, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2009-20
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    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2009/wp_econ_2009_20.pdf
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    Cited by:

    1. Fukase, Emiko, 2013. "Foreign job opportunities and internal migration in Vietnam," Policy Research Working Paper Series 6420, The World Bank.
    2. Prema-chandra Athukorala & Archanun Kophaiboon, 2013. "Trade and Investment Patterns in Asia: Implications for Multilateralizing Regionalism," Departmental Working Papers 2013-16, The Australian National University, Arndt-Corden Department of Economics.
    3. Prema-chandra Athukorala, 2008. "Trade and Investment Patterns in Asia : Regionalisation or Globalisation?," EABER Working Papers 21794, East Asian Bureau of Economic Research.
    4. Ian Brand-Weiner & Francesca Francavilla & Mattia Olivari, 2015. "Globalisation in Viet Nam: An Opportunity for Social Mobility?," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(1), pages 21-33, January.
    5. Prema-chandra Athukorala & Archanun Kohpaiboon, 2013. "Global Production Sharing, Trade Patterns and Industrialization in Southeast Asia," Departmental Working Papers 2013-18, The Australian National University, Arndt-Corden Department of Economics.
    6. Jayant Menon, 2013. "Can FTAs Support the Growth or Spread of International Production Networks in Asia?," Departmental Working Papers 2013-06, The Australian National University, Arndt-Corden Department of Economics.

    More about this item

    Keywords

    Vietnam; Asia; foreign direct investment; transitional economy; multinational enterprises;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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