EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: The paper discusses technological capabilities in Vietnamese industry considering mainly the role of foreign companies. The support of technological change is limited by specific disadvantages of Vietnamese environment, mainly insufficient organizational and legal shortcomings. Thus the connections between foreign and local companies did not produce expected results. The diffusion of technological skills takes place via training process, transfer of tacit and codified knowledge, spillover to local partners and influence absorption capacity of the local market. The cases of ten foreign companies from five different countries are presented. Major conclusions underline the threats of global operations of international companies when they are not supported by enlightened policies of companies and governments in host countries on one side and present the opportunities for these countries economy on the other.

Keywords: FDI; Joint-ventures; technology spillover; technological capabilities; tacit knowledge; low-cost-labor-trap; value chain; technical change

JEL-codes: F21; F23; O53

28 pages, December 1, 2002

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