COMPLETION REPORTTechnical Efficiency of Firms: Experiences from Japanese FDI (Foreign Direct Investment) Firms andLessons for Vietnam
Dr. Nguyen Dinh Chuc (+1)
Deputy DirectorVietnam Academy for Social Sciences
Institute of Southeast Asia Studies ResearcherVietnam has become one of favourable destinations of foreign direct investment of the world. This is a result ofpreferential policies for FDI projects, political stability, human resources with improving quality of the country.
According to General Statistics Office of Vietnam (2013), Japan is the biggest investor in terms of total registeredcapital and ranked third regarding number of projects. Japanese firms in Vietnam are seen as model for
Vietnamese domestic enterprises because of their performance and effciency. Evaluating the performance ofJapanese firms in Vietnam and making comparison with other enterprises in the country is an interesting exercise.
Furthermore, lessons from Japanese enterprises’ performance will benefit Vietnam domestic enterprises in thecontext of fierce competition and globalization process.
This study looks at the foreign direct investment from Japan and investigates the technical efficiency of Japanese
foreign invested enterprises in Vietnam. The research also compares the performance of other foreign invested anddometics enterprises in term of the technical efficiency. Findings from this research will provide policy makers
with support policies to improve the efficiency of domestic enterprises based on the analysis of Japanese firms.
Also, Vietnam domestic firms can benefit from the experience of Japanese firms on how to operate efficiently
through analysis of the research.
The analysis of the research shows that Japanese FDI firms in Vietnam enjoy a better performance than other firms
in the country. There are close links among Japanese FDI firms in Vietnam. The linkages between Japanese FDI
firms in Vietnam and domestic firms are limited, due to the high requirements of the Japanese FDI firms inVietnam in terms of quality of products and competitive costs structure. Also, it is due to the policy of priotizing
Japanese firms over other firms buy Japanese FDI firms in Vietnam. However, once getting into the network
domestic firms are confidence on the long term relationship with Japanese FDI firms in Vietnam. Kaizen is theworking model used by Japanese FDI firms in Vietnam and is encouraged to use by domestic firms.
The study uses quantitive analsysis which utilizes the maximum likelihood random-effects time-varying
inefficiency effects model to estimate technical efficiency of manufacturing enterprises in Vietnam, a panel data,from 2010 to 2013. Moreover, the paper also uses the propensity score matching method to compare the technicalefficiency between Japanese FDI enterprises and the rest. The results shows that technical efficiency of Japanese
FDI enterprises are higher 8%, 11%, 11%, 10%, and 2% than state-owned, private, domestic, and other FDI
enterprises, respectively. The study uses the maximum likelihood random-effects time-varying inefficiency effects
model to estimate technical efficiency of manufacturing enterprises in Vietnam, a panel data, from 2010 to 2013.
Moreover, the research also uses the propensity score matching method to compare the technical efficiency
between Japanese FDI enterprises and the rest.

Publication of the Results of Research Project:
Verbal Presentation (Date, Venue, Name of Conference, Title of Presentation, Presenter, etc.)
Title of presentation: Technical Efficiency of Japanese FDI firms in Vietnam
Periodic Scientific Workshop of the Institute of Regional Sustainable Development
Date: March, 2018
Venue: Meeting hall, 6th floor, 1A Lieu Giai, Ba Dinh, Hanoi

Thesis (Name of Journal and its Date, Title and Author of Thesis, etc.)

Book (Publisher and Date of the Book, Title and Author of the Book, etc.)