Data description

The paper uses the latest unbalanced panel data of firm-level surveys in Vietnam from 2007 to 2015. The dataset surveyed annually by General Statistics Office (GSO) includes the useful financial and internal indicators at firm-level such as firm's general information, ownership type, capital structure, balance sheet, income statement, etc... for all industries. This secondary data is quite powerful and used popularly for most recent studies in Vietnam related to FDI and firm productivity/ performance (Anwar & Nguyen, 2014; Anwar & Phi, 2011; Le

& Pomfret, 2011). Firstly, the firms operating in manufacturing industries at two-digit and four-digit industry codes are filtered from the whole population. Then, the duplicates and outliers are removed from the data. The remaining observations in kind of un-balanced panel data are used for further estimation. Besides, to calculate the vertically backward and vertically forward spillover, the study uses the input-output matrices in 2012 and 2015 collected by GSO to know the flows of input and output within the two-digit industry. Because the input-output matrix is surveyed every three years by GSO, it is impossible to collect input-output matrices for the whole period 2011-2015 for better matching. However, as discussed by (Lenaerts &

Merlevede, 2016), aggregate input-output matrix at industry level at a certain time are often used to reflect vertical linkages between firms for the not-far-away period due to data unavailability.

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Most of the empirical researchers conduct their studies using panel data and the sample of manufacturing firms (see Appendix 4). This can be explained by the dominant share of FDI equity in manufacturing sectors. More importantly, the manufacturing sector is characterized by complicated arrangements and adoption of technology, machinery, and equipment which create rooms for technology and knowledge transfer. It is important to note that the manufacturing and production industries have been accounted for the largest share at around 70 percent of inward FDI equity in 2017 (GSO). This proportion is far higher than FDI investment in remaining industries such as services, real estate, retail, and construction. That is the reason why this study attempts to explore FDI spillovers from foreign firms to domestic ones in the manufacturing sector. It is undeniable that high exposures and integration to foreign subsidiaries may contribute to promote technology transfer and gradually improve the level of domestic production technology.

Some data description has been shown in the following tables.

Table 3-4: Foreign share of total equity in two-digit manufacturing industries in Vietnam from 2007 to 2015

Processing wood and related products (except beds, cabinets, tables, chairs)

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Producing tobacco products 11.6% 19.6% 19.6% 19.5% 15.9% 17.6% 16.8% 10.8% 14.4%

Production and distribution of electricity, gas, hot water, steam and air conditioning

8.0% 6.4% 3.2% 4.7% 0.0% 3.0% 2.7% 1.6% 5.8%

Production of beds, wardrobes, tables and chairs 47.4% 36.2% 34.9% 41.4% 48.8% 41.2% 41.8% 32.3% 55.1%

Production of electrical equipment 48.5% 53.3% 48.6% 52.1% 55.8% 58.7% 63.3% 54.3% 70.5%

Production of leather and related products 70.7% 51.6% 73.3% 74.3% 76.2% 77.3% 76.3% 70.6% 82.3%

Production of machinery and equipment not yet classified

Repair, maintenance and installation of machinery and equipment

7.2% 9.0% 15.6% 27.5% 3.1% 9.9% 11.8% 10.1% 26.2%

Textiles 64.5% 66.2% 68.2% 75.5% 61.3% 70.9% 69.9% 53.1% 77.4%

Source: synthesized by author

Table 3-5: Number of total labor employed by two-digit manufacturing industries in Vietnam from 2007 to 2015

Processing wood and related products

(except beds, cabinets, tables, chairs) 112 114 110 98 41 115 118 111 67

hot water, steam and air conditioning

103 112 225 130 113 145 140 136 119

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Production of beds, wardrobes, tables and

chairs 270 261 249 241 156 264 276 304 278

Production of electrical equipment 118 118 123 126 105 139 143 153 143

Production of leather and related products 576 601 561 629 557 773 858 1,001 880 Production of machinery and equipment

not yet classified 46 48 50 46 43 57 60 62 54

Production of medicines, pharmaceutical

chemicals and pharmaceutical materials 30 33 35 33 29 39 41 44 38

Production of other means of transport 116 116 120 96 76 90 89 96 80

Repair, maintenance and installation of

machinery and equipment 21 22 24 15 14 29 31 31 22

Textiles 163 152 171 153 108 173 190 204 174

Table 3-6: Capital to labor ratio across two-digit manufacturing industries in Vietnam from 2007 to 2015

Processing wood and related products (except beds, cabinets, tables, chairs)

67 74 108 198 591 220 231 518 281

Producing coke, refined petroleum products 593 764 10,240 6,726 22,426 5,630 6,963 9,945 10,018 Producing other non-metallic mineral products 199 201 314 278 1,314 360 424 714 568

Producing paper and paper products 161 199 233 261 899 358 372 703 531

Producing products from rubber and plastic 153 186 231 247 715 319 355 572 422

Producing tobacco products 402 483 552 577 1,529 780 900 1,845 1,320

Production and distribution of electricity, gas, hot water, steam and air conditioning

755 830 1,011 1,377 2,794 2,085 2,655 3,115 1,691

Production of beds, wardrobes, tables and chairs 55 89 105 108 323 126 136 349 136

Production of electrical equipment 195 208 254 260 787 298 324 601 357

Production of leather and related products 29 49 42 43 119 50 52 95 63

Production of machinery and equipment not yet classified

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Repair, maintenance and installation of machinery and equipment

77 85 154 131 1,169 193 212 547 231

Textiles 144 190 210 281 658 335 347 509 447

Source: synthesized by author

Table 3-7: Revenue generated by two-digit manufacturing industries in Vietnam from 2007 to 2015

Processing wood and related products

(except beds, cabinets, tables, chairs) 18 22 25 32 24 60 70 70 55

Production and distribution of electricity, gas,

hot water, steam and air conditioning 81 120 334 332 209 389 468 404 407

Production of beds, wardrobes, tables and chairs 44 51 53 66 56 92 106 126 127

Production of electrical equipment 62 71 80 106 111 145 162 188 186

Production of leather and related products 50 59 62 80 89 128 160 203 211

Production of machinery and equipment

not yet classified 17 21 22 29 34 48 54 59 64

Production of medicines, pharmaceutical

chemicals and pharmaceutical materials 15 19 22 27 26 38 43 46 48

Production of other means of transport 74 83 97 116 142 167 170 179 183

Repair, maintenance and installation of

machinery and equipment 6 4 10 13 17 21 16 14 11

Textiles 53 58 73 94 81 149 170 188 174

Source: synthesized by author

To estimate productivity spillovers from FDI, this study draws on unbalanced panel data on 385,976 observations at 129,375unlisted Vietnam manufacturing enterprises over the period 2011-2015 surveyed annually. In this dissertation, the various manufacturing industries

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and their subsets are classified with two-digit and four-digit codes, respectively. Furthermore, the observations with no clues on identification code, negative capital stock, negative sales, negative outputs, outliers, duplicates, and other unreliable values or missing key variables are excluded to ensure the validity and reliability of the sample (Sourafel Girma, Gong, Gorg, &

Lancheros, 2015).

To estimate the effect if horizontal spillover on the average wage, the study uses annual enterprise firm-level data from the period 2007 to 2015 for 693,720 observations.

Table 3-9: Summary of variables

Capital intensive ln(FIXED ASSET/No. LABOR) KL 4.349 1.322 0.000 14.200

Gender ratio No. FEMALE/ No. MALE GR 0.743 1.708 0.000 279.000

Firm Income ln(NET INCOME) LN_NI 3.848 2.243 -2.303 17.900

Market share FIRM SALES / INDUSTRY SALES MS 0.004 0.029 0.000 1.000

Horizontal Spillover FOREIGN SALES / INDUSTRY SALES HOR_SP 0.109 0.170 0.000 1.000 Export orientation = 1 if exporting; = 0 for other EX_DUM 0.012 0.109 0.000 1.000 Import orientation = 1 if importing; = 0 for other IM_DUM 0.835 0.371 0.000 1.000 Ownership type Dummies for private (1), joint-stock (2),

FDI (3) and state-owned enterprises(4)

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EMPIRICAL FINDINGS AND