A new theoretical framework to assess Multinational Corporations’ motivation for Foreign Direct Investment: A case study on Vietnamese service industries

Saleh, Ali Salman; Nguyễn, Thị Lan; Vinen, Denis G.; Safari, Arsalan

doi:10.1016/j.ribaf.2017.07.007

Cited by 14 publications

(11 citation statements)

References 63 publications

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“…Vietnam is an emerging economy with civil law system, and its economy is being integrated to the global economy recently. Vietnamese economy is mostly relied on SMEs and it is an attractive place for foreign direct investment (Saleh et al, 2017). Because there are various regional and global emerging economies that have similar legal and economic structure as Vietnamese structure, this study can be useful for them as well.…”

Section: Conclusion and Further Implications For Practicementioning

confidence: 99%

Key determinants of SMEs’ export performance: a resource-based view and contingency theory approach using potential mediators

Safari

Saleh

2020

JBIM

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119

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Purpose Various barriers discourage small and medium-sized enterprises (SMEs) from entering or expanding their export activities in the international markets, especially SMEs in emerging markets. The purpose of this study is to look at capacity building to accelerate SMEs’ export performance. Design/methodology/approach This study draws on contingency theory and takes a resource-based and market-based view to provide a holistic understanding of the issue. This study uses primary data collected via extensive surveys from active SMEs in three main industrial regions in Vietnam to undertake confirmatory factor analysis and structural equation modeling for quantitative analysis. Findings The results confirm and show the significant effects of various determinants on firms’ export performance. These research findings have scientific contribution and significant implications by understanding the effective internal and external export drivers and mediators in an emerging market and enhancing SMEs’ export performance. Practical implications This study helps SMEs to improve their export performance by systemizing their decision-making in export activities, improving main export drivers highlighted in this study and developing required training programs for their teams. The outcomes also helps policymakers and regulators to improve the current SME ecosystem in Vietnam through training programs, improving policies, facilitating trades, providing more government assistance etc. The results of this study can be extended to other emerging markets with a similar economic structure and legal system. Originality/value Given the need for more work on export performance, this paper develops and tests a holistic conceptual framework that accounts for all aspects of export drivers, and provides a more comprehensive model for examining SMEs’ export drivers. This theoretical framework also incorporates three potential mediators (i.e. innovation strategy, export marketing strategy and business strategy) to investigate the effect of internal and external factors on export performance, highlighting the importance of the mediating effects on SMEs in achieving growth and competing in the international arena.

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Section: Conclusion and Further Implications For Practicementioning

confidence: 99%

Key determinants of SMEs’ export performance: a resource-based view and contingency theory approach using potential mediators

Safari

Saleh

2020

JBIM

Self Cite

119

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“…The probit functional form also has the advantage of being bounded between 0 and 1, implying that the predicted values cannot lie beyond the probability range and entail homoscedastic errors (Ghisetti & Pontoni, 2015). The observations are eighty-one relevant regression models (models that do not include informal institutions among the regressors, or that provide no further information for the purpose of the meta-analysis are excluded) corresponding to the empirical papers reviewed in section 3, with the exception of Mudambi & Navarra (2003), Choe & Lee (2016) and Saleh et al (2017), as mentioned in section 3, and of Li & Filer (2007), as explained below. These articles were collected by analysing the results provided by Scopus and the Social Science Research Network (SSRN) for combinations of the keyword "FDI" with keywords relating to informal institutions, i.e.…”

Section: Data and Research Methodsmentioning

confidence: 99%

“…The samples labelled as heterogeneous contain a mix of advanced, transition and developing economies 2 from various geographical areas. The three papers marked with an asterisk in Table 1 conduct their analysis either on different regions of the same country (Mudambi & Navarra, 2003;Choe & Lee, 2016), or on a very specific area and sector (Saleh et al, 2017), so they are not used as primary studies in the meta-analysis. The study by Paniagua et al (2017), marked with two asterisks in Table 1, represents an interesting but rather peculiar case: it investigates the influence of online social networks, such as Facebook and Twitter, on FDI.…”

Section: Heterogeneous Countriesmentioning

confidence: 99%

How do informal institutions influence inward FDI? A systematic review

Mondolo

2018

Econ Polit

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In the last fifteen years, the literature on international economics and international business has been paying increasing attention to informal institutions and to how they affect a variety of economic variables, inward FDI in particular. The main aims of this work are: to shed more light on a puzzling, elusive concept-informal institutions-also by drawing comparisons with related constructs; to overview the main types of informal institution and their effects on FDI inflows; to conduct a metaanalysis to explore the heterogeneity across empirical studies focusing on the effects of informal institutions on FDI inflows. The main findings of the present work are as follows: according to most of the existing literature, informal institutions, such as trust, social networks and corruption, matter for the purpose of attracting FDI. The sign is significantly determined by the type of informal institution considered. In particular, social networks and factors typically facilitating or in favour of FDI-such as trust and a positive attitude to liberalism-have a significant and positive impact on inward FDI, and this especially holds when the host country is a developing economy.

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“…As shown in Figure 1, FDI inflows rose markedly from 107 projects (US$735m registered capital) in 1990 to 3,147 projects (US $38.02bn registered capital) in 2019. A recent study by Saleh et al (2017) suggests that government policies, market-seeking and culture are the key determinants of multinationals' incentives to invest in Vietnam's service industries.…”

Section: Empirical Contextmentioning

confidence: 99%

Firm performance in the financial industry: the role of foreign entrants and their origin

Nguyen

2021

MBR

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Purpose This study aims to provide firm-level evidence on the relationship between the presence of financial services multinationals and indigenous counterparts’ performance, using a comprehensive sample of firms in the emerging financial industry in Vietnam. Design/methodology/approach This study uses the generalized method of moments with instrumental variables (IV/GMM) to deal with potential endogeneity problem. Of this technique, a pragmatic approach to constructing instruments is adopted, capitalizing on the geographical and industry segmentation of the local market. The empirical analyses also address statistical issues of the overall model significance, heteroskedasticity and multicollinearity. Findings The regression results reveal that foreign entrants have a positive and statistically significant association with indigenous firms’ labor productivity and the average wage, with a more pronounced impact on the latter. The increased entry of financial multinationals appears to be uncorrelated with indigenous firms’ profitability. The extended estimations also suggest that investor origin matters in determining spillover magnitude. The average estimate of Asian affiliates in the examined relationship is approximately half that of European affiliates, whereas foreign entrants originating from America show an insignificant role. Originality/value This study sheds light on the broader impacts of foreign financial affiliates by simultaneously exploring their impacts on three key dimensions of indigenous firm performance, namely, labor productivity, average wage and profitability. This paper also enriches the existing literature by disentangling the effects of foreign entrants from different regions of origin, which was largely neglected in the context of financial services multinationals.

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A new theoretical framework to assess Multinational Corporations’ motivation for Foreign Direct Investment: A case study on Vietnamese service industries

Cited by 14 publications

References 63 publications

Key determinants of SMEs’ export performance: a resource-based view and contingency theory approach using potential mediators

Key determinants of SMEs’ export performance: a resource-based view and contingency theory approach using potential mediators

How do informal institutions influence inward FDI? A systematic review

Firm performance in the financial industry: the role of foreign entrants and their origin

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