Does FDI Have Impacts on the Labor Productivity of Vietnamese Domestic Firms

Foreign direct investment has been considered a very important factor in the growth of recent Vietnam's economy and so far it has drawn a lot of concerns of economic researches in Vietnam. However, studies on the impacts of foreign direct investment on Vietnam's economy, especially the technological spillovers, are scarce compared with other developing countries. This study makes an attempt to figure out the main channels and estimate the degree of spillover effects in Vietnam using industry level data for 1995-1999 and 2000-2002 periods. The linkage between foreign investors and domestic private sectors is found to play an important role for technological spillovers from FDI in Vietnam.