Abstract:
This paper studies the growth and performance of foreign investment enterprises in developing countries in the context of global economic integration and domestic reform with a focus on Vietnam as a case study. A model of enterprise performance is constructed to provide empirical findings and evidence-based policy implications on the role of capital, investment, monetary and development policy, entrepreneurship, and legal reform in this important sector’s performance.
Machine summary:
"The paper is a rigorous study on the performance of one of Vietnam‟s important high-growth and high-profit industrial sectors, namely the foreign investment enterprises, during the past 20 years or so, and the role of capital, investment, monetary and development policy, entrepreneurship, legal reform, crises and economic integration on this performance.
The paper will focus on a modelling study of the causality of the FIE sector‟s high performance for corporate and government policy analysis and address the following research questions: (i) What fundamentally contributed to the high performance of the 100%-owned and especially joint-venture foreign investment enterprises in Vietnam in recent years?; (ii) Are these contributors different for these two sub-sectors?; (iii) Did the 2006 legal reform assist in this performance?; (iv) What are the effects of economic integration and financial crises on the FIE performance in Vietnam?; and (v) What are the best practice strategies for FIE development and survival in Vietnam?
6. Conclusion In the preceding sections, we have discussed the role of FIEs and their transformations, dynamics and performance in Vietnam in recent years, and constructed a simple model of enterprise performance with micro and macro-economic determination to explore and identify the fundamental factors for these FIEs‟ success, survival and possible expansion domestically and internationally in the two FIE sub-sectors in focus, namely 100%-owned and joint-venture FIEs. We have found mixed results for the conventional production factors of labor and capital, but strong support for the effects of economic integration and legal reform on these enterprises‟ performance as measured by the profit rates."