Additional insights of multinational corporation’s location network in Vietnam

Abstract

Multinational firms (MNCs) have increasingly dispersed their operations in different locations in response to the increased global competition. At a national level, their location decision creates an interdependent network of cities or provinces that influences inter-province relations and regional economic integration. By using sample data collected by Trade and Market Intelligence and network analysis approach, the study aims to explore (i) general structural characteristics of the FDI location network, (ii) roles, powers, and relational patterns of different provinces in the network, and (iii) resilience of the network to systemic risk in Vietnam, thereby providing some suggestions for investment promotion policies and regional planning. The study found that the network of provinces is loosely connected with only a few hubs located mostly in the southern region. In particular, neither Hanoi nor Ho Chi Minh City is the most influential node in the network. Provinces are not only connected but also structurally equivalent to many other provinces, regardless of spatial distance. These network structure characteristics suggest economic inequalities among regions and the vulnerability of the network to systemic risks. Therefore, policymakers should focus on developing more balanced regional planning and promoting province-to-province relations in order to have a tighter network of provinces and more regional economic integration.