The paper estimates technical performance of foreign-invested and local companies by analyzing a dataset for 11,210 companies in transport, warehousing and communication sector established by the GSO in 2010 and SFPF parameters. | 36 | Phan Thị Liên Efficiency of Foreign-Invested Transport Companies Efficiency of Foreign-Invested Transport Companies PHAN THỊ LIÊN* ABSTRACT The paper estimates technical performance of foreign-invested and local companies by analyzing a dataset for 11,210 companies in transport, warehousing and communication sector established by the GSO in 2010 and SFPF parameters. The results show that the average efficiency score of companies in this industry is . These results also challenge the argument that performance of foreign-invested companies is always higher than that of local ones. On the contrary, type of companies is the main factor that affects the performance of foreign-invested companies in Vietnam JEL classification: F23, D24, C23. Keywords: Foreign-invested companies, technical efficiency, stochastic frontier production function (SFPF), Vietnam 1. INTRODUCTION There have been numerous researches on efficiency of foreign direct investment, and many of them, such as Xiaming Liu (2000) and Nurhan Aydin (2007), found that foreign-invested companies in developing countries gained a better performance than local ones. Many others, however, saw no difference in business performance between foreign-invested and local companies. Peter Rowland and Banco de la Repyusblica (2006) surveyed 7,001 companies in Colombia and found that marginal profit of foreign-invested companies is lower than that of local ones. Employing data about 186 listed companies and TFP, Eyup Basti and Ahmet Akin (2008) also found no difference in productivity between foreign-invested and local companies. Combining parametric approaches to data for 25,411 industrial companies in 2005-2009, Ngô and Phan (2011) [1] demonstrated that not all foreign-invested companies gained better performance in comparison with local ones, and the difference was determined by type of companies [2] and sub-industry groups In the coming years, Vietnam should accelerate its economic growth rate to move away .
