Determinants Affecting the Development of North American Multinational Corporations in Vietnam

Abstract

To acquire greater achievements in international investment, multinational corporations (MNCs) have tried their best to successfully operate their subsidiary network at the global scale, Vietnam included. Vietnam is considered as one of the most ideal destinations for MNCs to invest in compared to other Asian markets, hence analyzing the determinants that possibly affect MNCs’ operation and development in the host countries is essential. In particular, it is important to investigate factors that impact the economic development of North American subsidiaries in Vietnam. We, thus, extract the information from 40 North American subsidiaries to examine such factors by means of the OLS analysis. The findings revealed that debt management capacity, size of the firms, and the number of employees represent positive correlations to the economic development of such subsidiaries. Besides, it is revealed that other factors, such as international experience, managers’ characteristics, and cultural distance, showed statistical insignificance to the firm’s economic development. Managerial implications for improving the subsidiaries’ growth in Vietnam would be proposed.