Impacts of FDI Presence and Product Sophistication on the Demand for Skilled and Unskilled Labour: Evidence from SMEs in Vietnam
摘要
This study employs the data from Vietnam Enterprises Survey (VES) for two years (2007 and 2011) to examine the effect of foreign direct investment (FDI) presence and product sophistication on the skilled and unskilled labour demand in Vietnam’s small and medium-sized enterprises (SMEs). The FDI presence in the same industry but different regions and FDI in the same region but different industries have a positive effect on the skilled labour demand and a negative impact on the unskilled labour demand. FDI in the same industry and industry has a negative effect on the skilled labour demand and an advantageous impact on the unskilled labour demand. The product sophistication index is found to positively affect the skilled labour demand and unskilled labour but decreasing the demand for unskilled labour. Thus, it is important to consider the effects of different types of FDI and the interaction between FDI presence and product sophistication on SMEs’ labour demand by skill levels.