Multinational Corporations and Spillovers in Vietnam - Adding Corporate Social Responsibility
Abstract: Vietnam carried out its economic reform Doi Moi in the mid-1980s. Market-based economic policies and legal frameworks have contributed to open up the country, trade barriers have been removed and Foreign Direct Investment (FDI) is now a fundamental part of the economy. In this paper, the presence of multinational corporations (MNCs) and how they have influenced the Vietnamese economy are examined. Specifically, MNCs spillover effects on domestic enterprises are discussed. Corporate Social Responsibility (CSR) is central and challenges and obstacles to implementation and development of CSR policies will be discussed. Globalization and the integration of the world economy have amplified the role of CSR. This paper shows that there is potential for positive spillover effects, such as production methods and information spread, from MNCs to domestic suppliers. However, the company must be large enough to be contracted and there is a risk that the gap will widen between the few large strong suppliers and the huge number of small- and medium-sized companies (SMEs) that operate in Vietnam. The paper also shows that MNCs can work as catalysts by transferring CSR guidelines and a long-term way of thinking to domestic companies. The dilemma is however that Vietnamese companies often lack interest and have problems referring to CSR.
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