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Internationalization, competitiveness enhancement and export performance of emerging market firms - Evidence from Vietnam

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The thesis revolves around the internationalization of Vietnamese firms - that is, how theinternational competitiveness of these firms is enhanced in terms of both upstream anddownstream value chain activities and the export performance implications hereof. ForVietnamese firms, as well as for other firms from emerging markets, internationalizationtrajectories may differ considerably from the internationalization patterns portrayed in classicaltheories (such as the Uppsala Model) based on observations of the internationalization of firmsfrom Western, developed market economies. Classical theories have primarily focused on firms’marketing & sales and networking capabilities as levers of internationalization – and less onupstream capabilities, such as manufacturing and auxiliary service competencies. Likewise thesituation in other emerging markets many Vietnamese firms are inserted in global value chains(GVCs) governed by multinational buyers. For these firms, manufacturing skills may be of equal- or greater - importance to export performance than the mastering of marketing & sales andnetworking in foreign markets.The thesis presents various theoretical perspectives on firms’ internationalization – perspectivesthat vary in terms of their focus on either upstream or downstream activities (or, theinterrelationship of these two types of activities). The thesis tries to fill out the knowledge gap asto which of these theoretical perspectives fit best the trajectories of Vietnamese manufacturingfirms involved in exports. In doing so, the thesis also draws on GVC models, entrepreneurialliterature, and studies of economic as well as strategic export performance.Unique survey data covering 226 Vietnamese manufacturers involved in exporting was collectedthrough face-to-face interviews conducted in Hanoi and Ho Chi Minh City. On the basis of thesedata a set of hypotheses is tested using structural equation modelling as a statistical tool. Theempirical study suggests that Vietnamese firms create international competitiveness in relation toboth upstream and downstream activities. Furthermore, the study suggests that upstreamcompetitiveness of the sample firms is significantly more attractive in terms of economic exportperformance (export sales, profitability and growth) than downstream competitiveness. However,when export performance is measured in more far-sighted, strategic terms, there are no significantdifferences between the two dimensions of competitiveness. The study also reveals some interesting industry differences: for firms in the “low-tech” textiles & garments industry,upstream competitiveness has greater impact on economic export performance than downstreamcompetitiveness. Conversely, downstream competitiveness results in a higher economic returnthan upstream competitiveness for firms from the “high-tech” industries of electronics andmechanical manufacturesIn the last part of the thesis, theoretical, empirical, and managerial implications are discussedalong with conclusions and suggestions for future research.

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Ha Thi Van Pham

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