Scientific Papers


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ISSN: 2306-3483 (Online), 2071-8330 (Print)

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The effects of foreign direct investment on the performance of small-medium enterprises: The case of Vietnam

Vol. 16, No 1, 2023


Norbert Bozsik


Hungarian University of Agriculture and Life Sciences 


ORCID 0000-0002-3115-6118

The effects of foreign direct investment on the performance of small-medium enterprises: The case of Vietnam

Duong Minh Ngo


MATE Doctoral School of Economic and Regional Sciences, 


Banking Academy of Vietnam, Vietnam 

ORCID 0009-0009-5956-0508

László Vasa


Széchenyi István University 


ORCID 0000-0002-3805-0244




Abstract. Foreign direct investment (FDI) is one of the most important elements influencing countries' international economic integration. FDI establishes direct, consistent, and long-lasting interconnections between economies as well as encouraging innovative technology and know-how transmission across territories while allowing host economies to offer their goods more extensively on global markets. FDI is also a source of investment financing that creates the climate for appropriate policies. Aside from the obvious advantages for all economic sectors, attracting FDI in small and midsize enterprises (SMEs) has a variety of additional benefits. For example, an opportunity to participate in the global supply chain for parts and components; an opportunity not yet wholly established in most developing nations but is critical for industrialization and improving income distribution through job creation for low-skilled employees. This study compared the impact of FDI on the performance of SMEs in Vietnam to that of a group of ASEAN nations with comparable economic structures including Indonesia, Malaysia, and Thailand. The empirical evidence indicates that FDI has a negative effect on the performance of SMEs in the group of four ASEAN member countries while having a positive influence on Vietnamese SMEs.


Received: May, 2022

1st Revision: February, 2023

Accepted: March, 2023


DOI: 10.14254/2071-8330.2023/16-1/4


JEL ClassificationG21, L26, O16

KeywordsFDI, SMEs, globalization