Do Domestic Firms Benefit from FDI? Evidence on Financial Performance from Vietnam

초록

Purpose - This research explores the effects of foreign direct investment (FDI) linkages on Vietnamese listed firms, focusing on return on assets (ROA) and return on equities (ROE). Design/methodology/approach - By using fixed-effect estimation, the study evaluates the impact on Vietnamese listed firms in service sector from 2008 to 2023. Findings - The findings reveal that FDI backward linkages exert a positive effect on ROA, while horizontal linkages show a positive effect on ROE. These results remain consistent for domestic firms. When ownership is considered, government firms benefit significantly from backward linkages, private firms gain from horizontal linkages. Further analysis on lagged effects proves that FDI spillovers gain significance over time. Research implications or Originality - These findings highlight that the benefits of FDI spillovers in the service sector are not uniform but evolve over time and depend on firm ownership structure, financial characteristics, and the nature of linkage channels.

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