Impacts of export-platform FDI on backward linkages - Do third country size, trade agreements and heterogeneity of firms matter? Evidence from the Vietnamese supporting industries
The paper investigates the impacts of export-platform foreign direct investment (FDI) on backward linkages. First, in a three-country model, these impacts are explained through the competition effect and the demand effect. Whenever the former is stronger than the latter, the investment has a negative impact on the level of backward linkages and conversely. Otherwise, the level of backward linkages is also affected by third country size, local content requirement, and the power of trade agreements between the host and the third countries. Second, in the case of the Vietnamese supporting industries between 2000 and 2012, export-platform FDI generates a negative effect. Moreover, local content requirement, and trade agreements between Vietnam and third countries (bilateral trade agreement with the U.S. and entry of Vietnam into the WTO) positively impact the level of backward linkages whereas third country size has an ambiguous impact.
Year of publication: |
2017
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Authors: | Nguyen-Huu, Thanh Tam ; Nguyen-Khac, Minh |
Publisher: |
Kiel : Kiel Institute for the World Economy (IfW) |
Subject: | export-platform FDI | backward linkages | local content requirement | third country size | power of trade agreements | Vietnam |
Saved in:
freely available
Series: | Economics Discussion Papers ; 2017-21 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 888184271 [GVK] hdl:10419/158563 [Handle] RePEc:zbw:ifwedp:201721 [RePEc] |
Classification: | F15 - Economic Integration ; F23 - Multinational Firms; International Business ; O1 - Economic Development |
Source: |
Persistent link: https://www.econbiz.de/10011650446