Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Internal capacity of local enterprises in foreign direct investment linkages: Insights from managers

Author(s): Nguyen Thanh Hoang

This paper aims to assess the internal capacity of local enterprises in their linkages with foreign direct investment enterprises. Through a survey of 308 local business managers and in-depth interviews with 19 managers of FDI enterprises; research shows that most FDI enterprises already have their supply chains; while the capacity of local enterprises is only at the regional and national levels; there is no indication of a strong enough level of competence for cross-national or global linkages. There is evidence of a positive relationship between the internal capacities in terms of “Corporate Governance”, “Technology”, and “Finance” and "Perception & Readiness for Linkage” of the domestic enterprises. This study contributes to the theory of the benefits of FDI and FDI absorptive capacity.

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