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31/07/2023
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Nguyễn Thị, B., Trần Mai, H., Hoàng Thị Đoan, T., Nguyen, L. T., & Nguyen, Y. T. (2023). Factors influencing the participation of Vietnamese enterprises in global value chains: insights from automobile production and assembly, electronics, and textile industries. Journal of International Economics and Management, 23(2), 16-32. https://doi.org/10.38203/jiem.023.2.0066
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Factors influencing the participation of Vietnamese enterprises in global value chains: insights from automobile production and assembly, electronics, and textile industries
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Abstract
This study aims to examine the factors influencing the global value chain position of enterprises from Vietnam’s leading industry sectors. The panel data analysis was conducted based on 208 observations from 52 automobile production and assembly, electronics, and textile enterprises from 2016 to 2020. The multiple linear regression model was utilized to analyze the factors influencing the participation of such industry sectors in the global value chain. The results indicate that technological capability has the most significant positive influence on the participation of Vietnamese enterprises in the global value chain, followed by FDI and business size. In contrast, business age does not have a discernible effect. These findings bring some policy implications for improving the country’s position in the global value chain, focusing on the automotive, electronics, and textile industries.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Keywords
Global value chain, Business position, Automobile industry, Electronics industry, Textile industry
References
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Vu, T. (2018), “Local competitiveness analysis framework”, Fulbright Economics Program Teaching Materials.
Wignaraja, G. (2012), “Engaging small and medium enterprises in production networks: firm-level analysis of five ASEAN economies”, Working Paper 361, Asian Development Bank Institute.
Wiklund, J. (1999), “The sustainability of the entrepreneurial orientation-performance relationship”, Entrepreneurship Theory and Practice, Vol. 24 No. 1, pp. 37 - 48.
Wiklund, J. and Shepherd, D. (2005), “Entrepreneurial orientation and small business performance: a approach”, Journal of Business Venturing, Vol. 20 No. 1, pp. 71 - 91.
Arudchelvan, M. and Wignaraja, G. (2015), “SME internationalization through global value chains and free trade agreements: Malaysian evidence”, Working Paper No. 515, Asian Development Bank Institute.
Banga, K. (2019), “Digital technologies and ‘value’ capture in global value chains: empirical evidence from Indian manufacturing firms”, WIDER Working Paper 2019/43, UNU-WIDER (WIDER Working Paper).
Cieslik, A., Michalek, J. and Michalek, A. (2014), “The influence of firm characteristics and export performance in Central and Eastern Europe: comparisons of Visegrad, Baltic and Caucasus states”, Entrepreneurial Business and Economics Review, Vol. 2 No. 1, pp. 7 - 18.
Dang, H.A. (2017), Vietnamese agriculture products export to the EU: situation and solutions, Division of Economics, Banking Academy, Hanoi, Vietnam.
Dang, N.V. (2019), “Study the impact of growth, firm size, capital structure, and profitability on enterprise value: evidence of enterprises in Vietnam”, VNU Journal of Science: Economics and Business, Vol. 28 No. 28, pp. 49 - 59.
ESCAP. (2009), Globalization of production and the competitiveness of small and medium-sized enterprises in Asia and the Pacific: trends and prospects, Economic and Social Commission for the Asia and the Pacific, New York.
Gereffi, G. (1994), Commodity chains and global capitalism, Praeger, Westport.
GSO. (2022), Statistical yearbook of Vietnam 2021, Statistical Publishing House, Vietnam.
Gujarati, D.N. (2005), Basic econometrics, Tata McGraw-Hill, New Delhi.
Harvie, C., Narjoko, D. and Oum, S. (2010), “Firm characteristic determinants of SME participation in production networks”, Working Papers ERIA-DP-2010-11, Economic Research Institute for ASEAN and East Asia.
Helpman, E. (1984), “A simple theory of international trade with multinational corporations”, Journal of Political Economy, Vol. 92 No. 3, pp. 451 - 471.
Helpman, E. and Krugman, P.R. (2005), Market structure and foreign trade: increasing returns, imperfect competition, and the international economy, MIT Press, Cambridge.
Hofstetter, J.S., De Marchi, V., Sarkis, J., Govindan, K., Klassen, R., Ometto, A.R., Spraul, K.S., Bocken, N., Ashton, W.S., Sharma, S., Jaeger-Erben, M., Jensen, C., Dewick, P., Schröder, P., Sinkovics, N., Ibrahim, S.E., Fiske, L., Goerzen, A. and Vazquez-Brust, D. (2021), “From sustainable global value chains to circular economy- different silos, different perspectives, but many opportunities to build bridges”, Circular Economy and Sustainability, Vol. 1 No. 1, pp. 21 - 47.
Hossain, M. and Reaz, M. (2007), “The determinants and characteristics of voluntary disclosure by Indian banking companies”, Corporate Social Responsibility and Environmental Management, Vol. 14 No. 5, pp. 274 - 288.
IMF. (2016), “IMF annual report 2016 - finding solutions together”, Available at https://www.imf.org/external/pubs/ft/ar/2016/eng/pdf/ar16_eng.pdf (Accessed 28 June, 2021).
Jurowetzki, R., Lema, R. and Lundvall, B.A. (2018), “Combining innovation systems and global value chains for development: towards a research agenda”, The European Journal of Development Research, Vol. 30 No. 3, pp. 364 - 388.
Kaplinksy, R. and Readman, J. (2001), Integrating SMEs in global value chains: towards partnership for development, United Nations Industrial Development Organization, Vienna.
Kotturu, C.M.V.V. and Mahanty, B. (2017), “Determinants of SME integration into global value chains: evidence from Indian automotive component manufacturing industry”, Journal of Advances in Management Research, Vol. 14 No. 3, pp. 313 - 331.
Krammer, S.M.S., Strange, R. and Lashitew, A. (2018), “The export performance of emerging economy firms: the influence of firm capabilities and institutional environments”, International Business Review, Vol. 27 No. 1, pp. 218 - 230.
Lu, Y., Shi, H., Luo, W. and Liu, B. (2018), “Productivity, financial constraints, and firms’ global value chain participation: evidence from China”, Economic Modelling, Vol. 73, pp. 184 - 194.
Luu, Q. (2020), Enhance the position of Vietnamese enterprises in the global value chain, Master thesis, National Economics University, Hanoi, Vietnam.
Monteiro, T.M.C., Moreira, M. do R.A. and Sousa, P.S.A. (2013), “Relationship between firm size and export performance: an exploratory analysis”, Economics and Management Research Projects: an International Journal, Vol. 3 No. 1, pp. 9 - 23.
Ngo, D.M. (2018), “The movement of global supply chains under the impact of Covid-19 – Opportunities and challenges for Vietnam”, Journal of Banking Science & Training, Vol. 221, pp. 14 - 27.
Nguyen, T.M.T. (2019), Factors influencing the participation of Vietnamese small and medium enterprises in the global value chain, Foreign Trade University.
Nguyen, V.K. and Chaudhary, S. (2019), “Vietnam in global value chain”, VNU Journal of Social Sciences and Humanities, Vol. 5 No. 3, pp. 292 - 313.
OECD. (2015), “Annual report on the OECD guidelines for multinational enterprises 2015”, OECD, Paris.
Porter, M.E. (1985), Competitive advantage: creating and sustaining superior performance, Free Press, New York.
Song, M. and Wang, S. (2016), “Can employment structure promote environment-biased technical progress?”, Technological Forecasting and Social Change, Vol. 112, pp. 285 - 292.
Song, M. and Wang, S. (2017), “Participation in global value chain and green technology progress: evidence from big data of Chinese enterprises”, Environmental Science and Pollution Research, Vol. 24 No. 2, pp. 1648 - 1661.
Tinta, A.A., Sarpong, D.B., Ouedraogo, I.M., Al Hassan, R., Mensah-Bonsu, A. and Ebo Onumah, E. (2018), “The effect of integration, global value chains and international trade on economic
growth and food security in ECOWAS”, Cogent Food & Agriculture, Vol. 4 No. 1, 1465327.
Torres de Oliveira, R., Nguyen, T., Liesch, P., Verreynne, M.L. and Indulska, M. (2021), “Exporting to escape and learn: Vietnamese manufacturers in global value chains”, Journal of World Business, Vol. 56 No. 4, 101227.
Tran, A.T. (2021), “Enhancing the role and position of Vietnam in the global production network and value chain”, 13th National Party Congress.
Tran, L.H. (2018), Role of foreign direct investment (FDI) in improving Vietnam’s position in global value chain, Labour and Social Publisher Company Limited, Hanoi.
Tran, N., Bailey, C., Wilson, N. and Phillips, M. (2013), “Governance of global value chains in response to food safety and certification standards: the case of shrimp from Vietnam”, World Development, Vol. 45, pp. 325 - 336.
Tran, N.M. and Hoang, T.T.Q. (2020), “Improving the international trade position of Vietnam's textile and apparel industry in the global value chain: a revealed comparative advantage approach”, Journal of International Economics and Management, Vol. 131, pp. 96 - 109.
Urata, S. and Baek, Y. (2020), “The determinants of participation in global value chains: a crosscountry, firm-level analysis”, Working Paper No. 1116, Asian Development Bank Institute.
VEIA. (2021), "Vietnam Electronic Industries Association", Available at http://www.veia.org.vn/default.asp?xt=xt57&page=content&linkID=203&menu=2 (Accessed 28 June, 2021).
Verwaal, E. and Donkers, B. (2002), “Firm size and export intensity: solving an empirical puzzle”, Journal of International Business Studies, Vol. 33 No. 3, pp. 603 - 613.
Vu, T. (2018), “Local competitiveness analysis framework”, Fulbright Economics Program Teaching Materials.
Wignaraja, G. (2012), “Engaging small and medium enterprises in production networks: firm-level analysis of five ASEAN economies”, Working Paper 361, Asian Development Bank Institute.
Wiklund, J. (1999), “The sustainability of the entrepreneurial orientation-performance relationship”, Entrepreneurship Theory and Practice, Vol. 24 No. 1, pp. 37 - 48.
Wiklund, J. and Shepherd, D. (2005), “Entrepreneurial orientation and small business performance: a approach”, Journal of Business Venturing, Vol. 20 No. 1, pp. 71 - 91.