Firm performance in the financial industry: the role of foreign entrants and their origin
研究了越南金融业中外国进入者对本土企业劳动生产率、平均工资和盈利能力的异质性影响，发现外国进入者显著提升本土企业劳动生产率和平均工资，但对盈利能力无显著影响，且来源地不同影响程度不同。
Purpose This study aims to provide firm-level evidence on the relationship between the presence of financial services multinationals and indigenous counterparts’ performance, using a comprehensive sample of firms in the emerging financial industry in Vietnam. Design/methodology/approach This study uses the generalized method of moments with instrumental variables (IV/GMM) to deal with potential endogeneity problem. Of this technique, a pragmatic approach to constructing instruments is adopted, capitalizing on the geographical and industry segmentation of the local market. The empirical analyses also address statistical issues of the overall model significance, heteroskedasticity and multicollinearity. Findings The regression results reveal that foreign entrants have a positive and statistically significant association with indigenous firms’ labor productivity and the average wage, with a more pronounced impact on the latter. The increased entry of financial multinationals appears to be uncorrelated with indigenous firms’ profitability. The extended estimations also suggest that investor origin matters in determining spillover magnitude. The average estimate of Asian affiliates in the examined relationship is approximately half that of European affiliates, whereas foreign entrants originating from America show an insignificant role. Originality/value This study sheds light on the broader impacts of foreign financial affiliates by simultaneously exploring their impacts on three key dimensions of indigenous firm performance, namely, labor productivity, average wage and profitability. This paper also enriches the existing literature by disentangling the effects of foreign entrants from different regions of origin, which was largely neglected in the context of financial services multinationals.