Working papers

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

Abstract: This paper studies how foreign direct investment (FDI) inflows affect domestic firm performance. Using commune-level geocoded data on Vietnamese firms and 100% foreign-owned multinational enterprises (MNEs), I construct localized measures of FDI exposure and estimate causal effects in a difference-in-differences framework that exploits Vietnam’s 2007 WTO accession. I find that greater exposure to nearby potential MNE demand raises domestic firm productivity by 9.3%, with gains concentrated among initially more productive firms, which are also disproportionately more likely to upgrade technology in response.

To interpret these heterogeneous effects, I develop a model featuring firm heterogeneity and fixed costs of supplying MNEs and adopting technology under monopolistic competition, where MNE local sourcing acts as a demand shock for domestic firms. Counterfactual simulations highlight the importance of targeted policies that more deeply embed domestic firms into MNE value chains: conditional on a 10% increase in MNE demand, reducing MNE–local supplier frictions by 10% amplifies FDI spillovers fivefold, while relaxing spatial frictions—expanding the effective reach of MNE demand from 16.5 km to 100 km—raises spillovers by roughly threefold.

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.