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Our study examines the spillover effects that arise from foreign and domestic exporting firms on the export decisions of local manufacturing firms in Vietnam between 2010 and 2018. There are positive horizontal spillover effects from both foreign and domestic exporting firms, while negative spillover effects are detected through the backward channel. Domestic exporting firms are found to generate positive forward spillover effects, whereas foreign direct investment exporting firms have negative forward spillover effects. Moreover, we observe opposite spillover effects from foreign and domestic exporting firms on the export exit of domestic firms, with a negative impact under the horizontal channel and a positive impact under the backward channel. Our research also reveals the effects of firms’ characteristics on the export participation and exit of domestic firms. The study suggests that the Vietnamese government should focus on enabling the FDI sector to create positive spillover effects, attracting foreign firms with export potential as well as supporting domestic exporting firms using and providing local intermediate inputs, and improving the technological and absorptive capabilities of domestic firms. [ABSTRACT FROM AUTHOR]

By using data from the Vietnam Enterprise Survey and applying the fixed effect model, this study investigates the determinants of product sophistication at the firm – multi-product level in Vietnam-a transitional economy – over 2010–2016. Estimations show that horizontal foreign direct investment (FDI) spillovers have a negative effect on product sophistication. We find a positive contribution of forward spillovers and a negative contribution of backward linkages. An interaction term between forward spillover and productivity has a negative effect but is insignificant. Estimated outcomes also indicate that the average amount of labour, revenue, productivity, technology level, and capital to labour ratio of firms has advantageous impacts on product sophistication. Our results are robust using different measurements of product sophistication. This article suggests that strengthening forward linkages by facilitating the supply of intermediate inputs from multinational firms and improving productivity, capital-to-labour ratio, and governance capability could help Vietnamese firms produce more sophisticated goods. [ABSTRACT FROM AUTHOR]