Working papers

FDI and Domestic Technology Upgrading Evidence from Vietnam’s WTO Accession (JMP) (Slide)

Abstract: This paper examines how foreign direct investment (FDI) shapes domestic firm performance in Vietnam. Using commune-level geocoded data on Vietnamese firms and 100% foreign-owned multinationals, I construct localized FDI exposure indexes and show that stronger backward linkages—where domestic firms supply nearby multinationals—are associated with higher productivity. Exploiting Vietnam’s 2007 WTO accession as a quasi-experiment, I find that more productive firms are disproportionately likely to upgrade technology in response to increased FDI, thereby improving productivity. To interpret these heterogeneous responses, I develop a model of firm heterogeneity with fixed costs of supplying MNEs and technology upgrading, which generates adoption patterns consistent with the data. The results highlight how firm-level heterogeneity mediates the gains from globalization and suggest that targeted policies fostering linkages with high-potential domestic suppliers can magnify FDI spillovers.

Uneven Gains from FDI: Firm-Level Evidence from Vietnam, with Yeongwoong Do  (Article Link)

Abstract: This paper examines whether the productivity-enhancing effects of FDI are broadly diffused in the host economy or instead reinforce polarization. While prior research has largely documented positive effects of FDI using macro-level data, we employ firm- and project-level evidence from Vietnam to show that these gains are concentrated among top-tier firms. Average productivity rises, but the distributional effects are uneven: leading firms benefit while lagging firms fall further behind, widening the productivity gap. These findings highlight the heterogeneous impact of FDI and suggest that macro-level analyses may obscure important distributional dynamics.

Agglomeration Effects of Anchor Firms: Evidence from Samsung’s Investment in Vietnam (Article Link)

Abstract: This paper examines how Samsung’s major investments reshaped Vietnam’s industrial landscape and affected the productivity of incumbent manufacturing firms. Samsung established two large plants—Yen Phong (Bac Ninh, 2008) and Pho Yen (Thai Nguyen, 2013)—each worth 7–9 billion USD, transforming these areas into national investment hubs. Using firm-level panel data (2004–2018) and the Synthetic Control Method, the study quantifies Total Factor Productivity (TFP) spillovers to local firms. The donor pool includes comparable counties across Samsung’s host provinces and a middle province matched on geographic and socioeconomic traits. Results reveal contrasting spillovers: Samsung’s Pho Yen plant boosted incumbent firms’ productivity, while the Yen Phong plant had adverse effects—likely due to weaker industrial linkages among local firms.