Foreign direct investment, exports, and firm performance in Southeast Asia

In this dissertation, I study the factors affecting economic integration and the impact of economic openness in developing countries, especially in Southeast Asian economies. Three self-contained but closely related studies are included. The first study investigates the importance of various factors that affect direct investment between countries. Most importantly, I use ethnic Chinese as an example to explore the significance of networking activities in facilitating economic interaction between economies. Threshold Tobit models are implemented to estimate bilateral direct investment among 71 countries including both industrial and developing countries. The empirical results suggest that ethnic Chinese networks are important in promoting foreign direct investment. There is evidence that the importance may differ for countries within Southeast Asia as compared with other regions. Nevertheless, the impact is significant for countries in all regions.; The second study uses a firm-level survey to examine the effects of foreign direct investment and foreign knowledge inflow on the performance of local Chinese firms. The empirical results indicate that foreign knowledge inflow is carried out mainly through direct foreign investment and other forms of close foreign involvement. Foreign technology is an important conduit in promoting Chinese firms' export and may also increase local firms' total employment and production. In addition, local non-affiliate firms can also benefit through business dealings with firms directly associated with foreign businesses.; In the third paper, I investigate the export behavior of 200 Vietnamese private firms in Hanoi and in HCM City. The goal is to study the emergence and development of the non-state exporting sector under a dominating state sector during the economic transition. The analysis shows that exporting firms are more labor intensive than non-exporting firms. Locating foreign customers at the beginning of the operation are crucial for export. Close relationships with the state sector as well as involvement in various types of networking activities are important in establishing buyer-seller relations with foreign customers. In some cases, firms start export after its domestic operation. These firms seem to hold higher standards for their input and output. They also have more active linkage with other firms including competitors, customers and business associations.