Lee and Hyun - Foreign Ownership without Knowledge Transfers
Description
This paper focuses on the linkage between foreign ownership and the performance of processing exporters vis-à-vis ordinary exporters and non-exporters. Recent literature finds that processing exporters are less productive than ordinary and non-exporters, while it is silent on the role of foreign ownership in explaining the underperformance of processing exporters. Using recent Vietnamese firm-level data in 2017-2019, we identify novel stylized facts on processing exporters and examine firm performance gaps by exporter type (ordinary, non, and processing) and ownership regime (foreign and domestic). The results show that processing exporters underperform non-exporters only among foreign-owned firms, not among domestically owned firms. Our heterogenous-firm model explains the processing-non-exporter performance gap based on the limited firm-specific asset transfers and low sales fixed costs that processing exporters bear. Our counterfactual analysis highlights that tariff reductions may limit productivity gains from trade when processing exporters are present in the economy. These files accompany the paper to guide replicating its simulation results. The paper also includes empirical analysis employing the Vietnamese Enterprise Survey (VES). The Stata codes for all regressions in the paper are found in ``regressionsreplication.do.'' Due to privacy restrictions, we cannot share the VES data. Simulation results are shown in Figures 3 and 5 in the paper.
Files
Steps to reproduce
Refer to ReadMe.pdf.