Abstract
Our study examines the spillover effects that arise from foreign and domestic exporting firms on the export decisions of local manufacturing firms in Vietnam between 2010 and 2018. There are positive horizontal spillover effects from both foreign and domestic exporting firms, while negative spillover effects are detected through the backward channel. Domestic exporting firms are found to generate positive forward spillover effects, whereas foreign direct investment exporting firms have negative forward spillover effects. Moreover, we observe opposite spillover effects from foreign and domestic exporting firms on the export exit of domestic firms, with a negative impact under the horizontal channel and a positive impact under the backward channel. Our research also reveals the effects of firms’ characteristics on the export participation and exit of domestic firms. The study suggests that the Vietnamese government should focus on enabling the FDI sector to create positive spillover effects, attracting foreign firms with export potential as well as supporting domestic exporting firms using and providing local intermediate inputs, and improving the technological and absorptive capabilities of domestic firms.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 See Le and Pomfret (Citation2011), Anwar and Nguyen (Citation2011), Vu (Citation2012), Le and Shaffer (Citation2013), Kokko and Thang (Citation2014), Newman et al. (Citation2016), Vu et al. (Citation2016), Huynh et al. (Citation2021), Le (Citation2019), Yang (Citation2019), Ha, Holmes, and Hassan (Citation2020), Nguyen and Nguyen (Citation2020), and among others.
2 It should be noted that the aggregation of the sector of activity at two-digit is rather broad compared to three-digit sectoral aggregation (including 242 sectors). However, when using a more detailed digit level, the number of observations decreases significantly. In addition, the two-digit level is detailed enough to distinguish the differences between product groups.
3 It is admitted that GSO published an input-output in 2016. However, we use the 2012 input-output table because of limited access. Thus, a shortcoming of our paper is that IO does not vary over time.
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Funding
This work was supported by the Economic Research Institute for ASEAN and East Asia (ERIA) for 'Deepening Economic Integration: Global Market Entry, Survival, and Exit of Firms: Understanding the Process and the Effects' project under Grant ERIA Microdata Research Fiscal Year 2020. The earlier version of this paper has been published as ERIA Discussion Paper Series No. 410, December 2021.
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