FDI incentives pay—politically

The authors find that there are strong political benefits to attracting FDI at the state-level in the United States, and that fiscal incentives for attracting such investment, regardless of their effectiveness, may be a strategic political tool for state politicians

Globalization and state capitalism: assessing Vietnam's accession to the WTO

What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private _rms. Then we empirically study the effect of the 2007 WTO accession on selection, competition, and productivity. Our results show that WTO entry is associated with higher probability of exit, lower firm profitability, and substantial increases in productivity for private firms but not for SOEs. Our estimates suggest that the overall productivity gains would have been about 40% larger in a counterfactual Vietnamese economy without SOEs. We highlight some economic mechanisms possibly driving these findings through the lenses of a model of trade with heterogeneous private and state-owned firms. The model suggests that political/regulatory barriers to entry and access to credit are key drivers of the different response of SOEs to trade liberalization. Further empirical tests broadly validate these insights

Testing the Drivers of Corporate Environmentalism in Vietnam

What motivates private firms’ willingness to invest in green technologies and environmentally friendly operations? Some emphasize enhanced government regulation and enforcement, while others point to the greater potential of societal pressure. In this study, we use a survey experiment with more than 10,000 firms in Vietnam to test which type of stakeholder pressure has the strongest impact on domestic and foreign business leaders’ intention to invest in green operations. We find that the effectiveness of stakeholder pressure is conditioned by the firms’ target markets. Foreign investors are more susceptible than domestic firms to intensive regulatory pressure. Accounting for export orientation, however, we find that the most amenable policy targets for regulatory pressure are foreign firms aiming to sell in the Vietnamese domestic market

FDI的政治鼓励

作者发现，对于美国各州而言，吸引外国直接投资有极大的政治利益。许多吸引投资的财政激励政策，可能是州内政治家们的一种战略政治手段，无论其有效与否

Historical Communist Party Strength and Modern Party Loyalty. A Replication Study of Barceló (PNAS, 2021)

Does exposure to violence create more politically engaged citizens? In a PNAS paper, Barceló (2021) asks this provocative question and proposes an intricate and original socio-psychological theory to answer it. Barceló also employs a research design that seeks to account for reverse causality to address the fact that more engaged places may have been targeted. Unfortunately, even after a correction, his statistical analysis remains dogged by coding, historical, and contextual errors, which bias results and lead to misleading conclusions. When we account for these mistakes with simple and reasonable corrections, the main results no longer hold. Rather, we show that the true underlying explanation is more mundane: areas that were sources of pre-war communist insurgency strength were targeted for their activity during the conflict, and they remain more loyal to the regime today

Globalization and State Capitalism: Assessing Vietnam's Accession to the WTO

What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private firms. We embed some of these features characterizing SOEs operations in a model of trade with firm heterogeneity and show that they can hinder the selection effects of openness and tame the aggregate productivity gains from trade. We empirically test these predictions analyzing the response of Vietnamese firms to the 2007 WTO accession. Our result show that WTO accession is associated with higher probability of exit, lower markups, and substantial increases in productivity for private firms but not for SOEs. Domestic barriers to entry and preferential access to credit are key drivers of the different response of SOEs to trade liberalization. Our estimates suggest that the overall productivity gains would have been about 66% larger in a counterfactual Vietnamese economy without SOEs

Firm Growth and Corruption: Empirical Evidence from Vietnam

This article tests whether firm growth reduces corruption, using data from over 10,000 Vietnamese firms. We employ instrumental variables based on growth in a firm's industry in other provinces within Vietnam and in China. We find that firm growth reduces bribes as a share of revenues. We propose a mechanism for this effect whereby government officials’ decisions about bribes are modulated by inter-jurisdictional competition. This mechanism also implies that growth reduces bribery more for more mobile firms; consistent with this prediction, we find a larger effect for firms with transferable rights to their land or operations in multiple provinces.National Science Foundation (U.S.