FDI Inflows and Domestic Firms: Adjustments to New Export Opportunities / Brian McCaig, Nina Pavcnik, Woan Foong Wong.

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McCaig, Brian

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w30729.Publication details: Cambridge, Mass. National Bureau of Economic Research 2022.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: We investigate the long-term effects of export opportunities to a large destination market on multinational affiliates and domestic firms in a low-income host country. The US-Vietnam Bilateral Trade Agreement reduced US import tariffs on exports from Vietnam. Tariff reductions led to entry of foreign and private firms and to employment expansion in formal manufacturing, with foreign entrants contributing most to employment growth. State firms stall employment reallocation through slower contraction. Half of tariff-induced foreign entrant growth is post-entry and exporter-driven. Foreign entrants are from non-US sources, highlighting the importance of studying FDI from multiple source countries in a lower-income host.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w30729 (Browse shelf(Opens below))	Not For Loan

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December 2022.

We investigate the long-term effects of export opportunities to a large destination market on multinational affiliates and domestic firms in a low-income host country. The US-Vietnam Bilateral Trade Agreement reduced US import tariffs on exports from Vietnam. Tariff reductions led to entry of foreign and private firms and to employment expansion in formal manufacturing, with foreign entrants contributing most to employment growth. State firms stall employment reallocation through slower contraction. Half of tariff-induced foreign entrant growth is post-entry and exporter-driven. Foreign entrants are from non-US sources, highlighting the importance of studying FDI from multiple source countries in a lower-income host.