Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271812 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10168
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We investigate the long-term effects of export opportunities to a large destination market on multinational affiliates and domestic firms in a low-income host country. The US-Vietnam Bilateral Trade Agreement reduced US import tariffs on exports from Vietnam. Tariff reductions led to entry of foreign and private firms and to employment expansion in formal manufacturing, with foreign entrants contributing most to employment growth. State firms stall employment reallocation through slower contraction. Half of tariff-induced foreign entrant growth is post-entry and exporter-driven. Foreign entrants are from non-US sources, highlighting the importance of studying FDI from multiple source countries in a lower-income host.
Subjects: 
trade liberalization
employment
foreign direct investment
exporting
firm dynamics
Vietnam
JEL: 
F13
F14
O14
O19
Document Type: 
Working Paper
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