We examine the impact of foreign direct investment (FDI) on the productivity of Vietnamese domestic firms, using annual enterprise survey data from 2009 to 2018, which cover approximately 300,000 firm–year observations. We estimate total factor productivity with the Levinsohn–Petrin method and relate it to lagged horizontal and backward foreign presence constructed from input–output linkages. Spillovers are examined by FDI origin (Association of Southeast Asian Nations; Japan; People’s Republic of China; and Taipei,China) and by firm characteristics, including size, export status, technology intensity, and absorptive capacity. We find little evidence of productivity gains from horizontal exposure, but robust positive backward-linkage spillovers, strongest for Japanese and Chinese investors. Effects are larger for small- and medium-sized enterprises and for firms with stronger absorptive capacity or greater trade engagement. Governance conditions also moderate spillover strength, underscoring origin-specific complementarities and capability upgrading in developing-country production networks.
Huynh et al. (Tue,) studied this question.