Do business linkages play a role in upgrading workers’ skills among small and medium-sized enterprises in Vietnam?
Main Article Content
Abstract
Business linkages are of interests to many firms as they can have positive impacts on firms’ performance. Nevertheless, there have been few studies on possible influence of business linkages on motivation to upgrade workers’ skills among small- and medium-sized enterprises (SMEs). Applying a Probit estimation model with Fixed-Effects techniques for panel data with a sample covering more than 6,000 observations of SMEs from Vietnam, the study provides key findings. First of all, the increase in the number of business linkages helps SMEs to upgrade workers’ skills by reducing the percentage of unskilled workers. Secondly, the rise in workers’ skills increases the probability that SMEs train their existing workers, but not new workers. Finally, the increase in firm size plays an important role for SMEs in Vietnam to upgrade their workers’ skills.
Article Details
Keywords
Business linkages, Skills, SMEs, Vietnam
References
Aitken, Brian J. and Harrison, Ann E (1997), Do domestic firms benefit from foreign direct investment? Evidence from panel data, Mimeo, Columbia University, 1997.
Anand, B. and Khanna, T. (2000), “Do firms learn to create value? The case of alliances”, Strategic Management Journal, Vol. 21 No. 3, pp. 295 - 315. Bernard, A.B., Jensen, J.B. and Schott, P.K. (2006), “Survival of the best fit: exposure to low- wage countries and the (uneven) growth of U.S. manufacturing plants”, Journal of International Economics, Vol. 68 No. 1, pp. 219 - 237.
Blomström, M., Kokko, A. and Zejan, M. (2000), Foreign direct investment: firm and host country strategies, London: MacMillan Press.
Burt, R. (1992), “Structural holes versus network closure as social capital”, in Lin, N., Cook, K.S. and Burt, R.S. (Eds), Social Capital: Theory and Research. NY:
Aldine DE Gruyter.
Chen, H. and Chen, T.J. (1998), “Network linkages and location choice in foreign direct investment”, Journal of International Business Studies, Vol. 29 No. 3, pp. 445 - 467.
Cross, V. (2016), “The advantages of business alliances, small business - chron.com”, available at http://smallbusiness.chron.com/advantages-business-alliances22151.html (accessed May 15, 2020).
Deeds, D.L. and Hill, C.W.L. (1996), “Strategic alliances and the rate of new product development: an empirical study of entrepreneurial biotechnology firms”, Journal of Business Venturing, Vol. 11, pp. 41 - 55.
Duanmu, J.L. and Fai, F.M. (2007), “A processual analysis of knowledge transfers:
from foreign MNEs to Chinese suppliers”, International Business Review, Vol. 16 No. 4, pp. 449 - 473.
Dunning, J.H., and Lundan, S. (2008), Multinational enterprises and the global economy, Cheltenham: Edward Elgar.
Fynes, B., Voss, C. and de Búrca, S. (2005), “The impact of supply chain relationship quality on quality performance”, International Journal of Production Economics, Vol. 96 No. 3, pp. 339 - 354.
Fosfuri, A., Motta, M. and Rønde, T. (2001), “Foreign direct investment and spillovers through workers’ mobility” Journal of International Economics, Vol. 53 No. 1, pp. 205 - 222.
Girma, S., Görg, H. and Piso, M. (2008), “Exporting, linkages, and productivity spillovers from foreign direct investment”, Canadian Journal of Economics, Vol. 41 No. 1, pp. 320 - 340.
Girma, S., Greenaway, D. and Wakelin, K. (2001), “Who benefits from foreign direct investment in the UK?”, Scottish Journal of Political Economy, Vol. 48 No. 2, pp. 119 - 133.
Giroud, A. (2003), Transnational corporations, technology, and economic development: backward linkages and knowledge transfer in South-East Asia, Cheltenham Northampton: Edward Elgar.
Giroud, A. (2007), “Investment competition and multinational enterprises: the experience of Vietnam after Malaysia”, International Business Review, Vol. 16 No. 2, pp. 159 - 176.
General Statistic Office. (2017), “Online statistics of the general statistic office”, available at http://www.gso.gov.vn/default.aspx?tabid=382&ItemID=18686 (accessed September 16, 2019).
GTZ. (2006), “Economic reform and Private sector development section: Sector project Innovative tools for Private sector development”, available at https://www.giz.de/en/ worldwide/79258.html (accessed May 15, 2020).
Günther, J. (2005), “Technology spillovers from foreign investors in transition economies - Are the effects still expected?”, Economic and Business Review for Central and South-Eastern Europe, Vol. 7 No. 1, pp. 5 - 24.
Gupta, A.K. and Govindarajan, V. (2000), “Knowledge flows within multinational corporations”, Strategic Management Journal, Vol. 21 No. 4, pp. 473 - 496.
Hagedoorn, J. (2006), “Understanding the cross-level embeddedness of interfirm partnership formation”, Academy of Management Review, Vol. 31 No. 3, pp. 670 - 680.
Hagedoorn, J. and Hesen, G. (2007), “Contract law and the governance of interfirm technology partnerships: an analysis of different modes of partnering and their contractual implications”, Journal of Management Studies, Vol. 44 No. 3, pp. 342 - 366.
Hansen, M.T. (1999), “The search-transfer problem: the role of weak ties in sharing knowledge across organization subunits”, Administrative Science Quarterly, Vol. 44 No. 1, pp. 82 - 111.
Hoang, H. and Rothaermel, F.T. (2005), “The effect of general and partner-specific alliance experience on joint R&D project performance”, Academy of Management Journal, Vol. 48 No. 2, pp. 332 - 345.
Holmqvist, M. (2003), “Intra- and inter-organizational learning processes: an empirical comparison”, Scandinavian Journal of Management, Vol. 19, pp. 443 - 466.
Javorcik, B.S. (2004), “Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages”, American Economic Review, Vol. 9 No. 3, pp. 605 - 627.
Lall, S. (1980), “Vertical inter firm linkages in LDCs: an empirical study”, Oxford Bulletin of Economics and Statistics, Vol. 42 No. 3, pp. 203 - 226.
Murray, J.Y., Kotabe, M. and Zhou, J.N. (2005), “Strategic alliance-based sourcing and market performance: Evidence from foreign firms operating in China”, Journal of International Business Studies, Vol. 36 No. 2, pp. 187 - 208.
Nour, S.M. (2013), The relationship between technological progress, human capital (Skill) and skill upgrading, In Technological Change and Skill Development in Sudan. Berlin, Heidelberg: Springer.
Phung, T.D. (2019), “Ho tro doanh nghiep nho va vua Viet Nam phat trien trong giai doan hien nay (Supporting the development of Vietnamese Small and Medium – Sized enterprises during current period)”, available at http://tapchitaichinh.vn/taichinh-kinh-doanh/ho-tro-doanh-nghiep-nho-va-vua-viet-nam-phat-trien-tronggiai-doan-hien-nay-314736.html (accessed February 16, 2019).
Putnam, R. (1993), Making democracy work: civic tradition in modern Italy, Princeton: Princeton University Press.
Reagans, R. and McEvily, B. (2003), “Network structure and knowledge transfer:
the effects of cohesion and range”, Administrative Science Quarterly, Vol. 48 No. 2, pp. 240 - 267.
Rodriguez-Clare, A. (1996), “Multinationals, linkages, and economic development”, American Economic Review, Vol. 86 No. 4, pp. 852 - 873.
Saggi, K. (2002), “Trade, foreign direct investment, and international technology transfer: a survey”, World Bank Research Observer, Vol. 17 No. 2, pp. 191 - 235. Sampson, R.C. (2005), “Experience effects and collaborative returns in R&D alliances”, Strategic Management Journal, Vol. 26 No. 11, pp. 1009 - 1031.
Santangelo, G.D. (2009), “MNCs and linkages creation: evidence from a peripheral area”, Journal of World Business, Vol. 44 No. 2, pp. 192 - 205.
Spencer, J.W. (2008), “The impact of multinational enterprise strategy on indigenous enterprises: horizontal spillovers and crowding out in developing countries”, Academy of Management Review, Vol. 33 No. 2, pp. 341 - 361.
Tallman, S., Jenkins, M., Henry, N. and Pinch, S. (2004), “Knowledge, clusters and competitive advantage”, Academy of Management Review, Vol. 29 No. 2, pp. 258 - 271.
UNCTAD. (2006), A survey of support by investment promotion agencies to linkages, New York, Geneva: United Nations.
UNU-WIDER. (2019), “Viet Nam SME”, available at https://www.wider.unu.edu/ database/viet-nam-sme-database (accessed May 6, 2019).
Anand, B. and Khanna, T. (2000), “Do firms learn to create value? The case of alliances”, Strategic Management Journal, Vol. 21 No. 3, pp. 295 - 315. Bernard, A.B., Jensen, J.B. and Schott, P.K. (2006), “Survival of the best fit: exposure to low- wage countries and the (uneven) growth of U.S. manufacturing plants”, Journal of International Economics, Vol. 68 No. 1, pp. 219 - 237.
Blomström, M., Kokko, A. and Zejan, M. (2000), Foreign direct investment: firm and host country strategies, London: MacMillan Press.
Burt, R. (1992), “Structural holes versus network closure as social capital”, in Lin, N., Cook, K.S. and Burt, R.S. (Eds), Social Capital: Theory and Research. NY:
Aldine DE Gruyter.
Chen, H. and Chen, T.J. (1998), “Network linkages and location choice in foreign direct investment”, Journal of International Business Studies, Vol. 29 No. 3, pp. 445 - 467.
Cross, V. (2016), “The advantages of business alliances, small business - chron.com”, available at http://smallbusiness.chron.com/advantages-business-alliances22151.html (accessed May 15, 2020).
Deeds, D.L. and Hill, C.W.L. (1996), “Strategic alliances and the rate of new product development: an empirical study of entrepreneurial biotechnology firms”, Journal of Business Venturing, Vol. 11, pp. 41 - 55.
Duanmu, J.L. and Fai, F.M. (2007), “A processual analysis of knowledge transfers:
from foreign MNEs to Chinese suppliers”, International Business Review, Vol. 16 No. 4, pp. 449 - 473.
Dunning, J.H., and Lundan, S. (2008), Multinational enterprises and the global economy, Cheltenham: Edward Elgar.
Fynes, B., Voss, C. and de Búrca, S. (2005), “The impact of supply chain relationship quality on quality performance”, International Journal of Production Economics, Vol. 96 No. 3, pp. 339 - 354.
Fosfuri, A., Motta, M. and Rønde, T. (2001), “Foreign direct investment and spillovers through workers’ mobility” Journal of International Economics, Vol. 53 No. 1, pp. 205 - 222.
Girma, S., Görg, H. and Piso, M. (2008), “Exporting, linkages, and productivity spillovers from foreign direct investment”, Canadian Journal of Economics, Vol. 41 No. 1, pp. 320 - 340.
Girma, S., Greenaway, D. and Wakelin, K. (2001), “Who benefits from foreign direct investment in the UK?”, Scottish Journal of Political Economy, Vol. 48 No. 2, pp. 119 - 133.
Giroud, A. (2003), Transnational corporations, technology, and economic development: backward linkages and knowledge transfer in South-East Asia, Cheltenham Northampton: Edward Elgar.
Giroud, A. (2007), “Investment competition and multinational enterprises: the experience of Vietnam after Malaysia”, International Business Review, Vol. 16 No. 2, pp. 159 - 176.
General Statistic Office. (2017), “Online statistics of the general statistic office”, available at http://www.gso.gov.vn/default.aspx?tabid=382&ItemID=18686 (accessed September 16, 2019).
GTZ. (2006), “Economic reform and Private sector development section: Sector project Innovative tools for Private sector development”, available at https://www.giz.de/en/ worldwide/79258.html (accessed May 15, 2020).
Günther, J. (2005), “Technology spillovers from foreign investors in transition economies - Are the effects still expected?”, Economic and Business Review for Central and South-Eastern Europe, Vol. 7 No. 1, pp. 5 - 24.
Gupta, A.K. and Govindarajan, V. (2000), “Knowledge flows within multinational corporations”, Strategic Management Journal, Vol. 21 No. 4, pp. 473 - 496.
Hagedoorn, J. (2006), “Understanding the cross-level embeddedness of interfirm partnership formation”, Academy of Management Review, Vol. 31 No. 3, pp. 670 - 680.
Hagedoorn, J. and Hesen, G. (2007), “Contract law and the governance of interfirm technology partnerships: an analysis of different modes of partnering and their contractual implications”, Journal of Management Studies, Vol. 44 No. 3, pp. 342 - 366.
Hansen, M.T. (1999), “The search-transfer problem: the role of weak ties in sharing knowledge across organization subunits”, Administrative Science Quarterly, Vol. 44 No. 1, pp. 82 - 111.
Hoang, H. and Rothaermel, F.T. (2005), “The effect of general and partner-specific alliance experience on joint R&D project performance”, Academy of Management Journal, Vol. 48 No. 2, pp. 332 - 345.
Holmqvist, M. (2003), “Intra- and inter-organizational learning processes: an empirical comparison”, Scandinavian Journal of Management, Vol. 19, pp. 443 - 466.
Javorcik, B.S. (2004), “Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages”, American Economic Review, Vol. 9 No. 3, pp. 605 - 627.
Lall, S. (1980), “Vertical inter firm linkages in LDCs: an empirical study”, Oxford Bulletin of Economics and Statistics, Vol. 42 No. 3, pp. 203 - 226.
Murray, J.Y., Kotabe, M. and Zhou, J.N. (2005), “Strategic alliance-based sourcing and market performance: Evidence from foreign firms operating in China”, Journal of International Business Studies, Vol. 36 No. 2, pp. 187 - 208.
Nour, S.M. (2013), The relationship between technological progress, human capital (Skill) and skill upgrading, In Technological Change and Skill Development in Sudan. Berlin, Heidelberg: Springer.
Phung, T.D. (2019), “Ho tro doanh nghiep nho va vua Viet Nam phat trien trong giai doan hien nay (Supporting the development of Vietnamese Small and Medium – Sized enterprises during current period)”, available at http://tapchitaichinh.vn/taichinh-kinh-doanh/ho-tro-doanh-nghiep-nho-va-vua-viet-nam-phat-trien-tronggiai-doan-hien-nay-314736.html (accessed February 16, 2019).
Putnam, R. (1993), Making democracy work: civic tradition in modern Italy, Princeton: Princeton University Press.
Reagans, R. and McEvily, B. (2003), “Network structure and knowledge transfer:
the effects of cohesion and range”, Administrative Science Quarterly, Vol. 48 No. 2, pp. 240 - 267.
Rodriguez-Clare, A. (1996), “Multinationals, linkages, and economic development”, American Economic Review, Vol. 86 No. 4, pp. 852 - 873.
Saggi, K. (2002), “Trade, foreign direct investment, and international technology transfer: a survey”, World Bank Research Observer, Vol. 17 No. 2, pp. 191 - 235. Sampson, R.C. (2005), “Experience effects and collaborative returns in R&D alliances”, Strategic Management Journal, Vol. 26 No. 11, pp. 1009 - 1031.
Santangelo, G.D. (2009), “MNCs and linkages creation: evidence from a peripheral area”, Journal of World Business, Vol. 44 No. 2, pp. 192 - 205.
Spencer, J.W. (2008), “The impact of multinational enterprise strategy on indigenous enterprises: horizontal spillovers and crowding out in developing countries”, Academy of Management Review, Vol. 33 No. 2, pp. 341 - 361.
Tallman, S., Jenkins, M., Henry, N. and Pinch, S. (2004), “Knowledge, clusters and competitive advantage”, Academy of Management Review, Vol. 29 No. 2, pp. 258 - 271.
UNCTAD. (2006), A survey of support by investment promotion agencies to linkages, New York, Geneva: United Nations.
UNU-WIDER. (2019), “Viet Nam SME”, available at https://www.wider.unu.edu/ database/viet-nam-sme-database (accessed May 6, 2019).