VIETNAM AND FOREIGN DIRECT INVESTMENT: POTENTIALS AND CHALLENGES ON THE LABOR MARKET

Year 2013, Volume: 5 Issue: 2, 55 - 64, 01.12.2013

Nathalie Homlong Elisabeth Springler

Abstract

For several years Vietnam has been receiving attention as an attractive business
location for foreign companies. But in spite of overall positive economic
developments, foreign companies in Vietnam also experience challenges, e.g.
connected to bureaucracy and corruption. Another issue that is of crucial
importance for foreign companies in foreign markets are the conditions on the
labor market. This paper investigates questions about the potentials and
challenges for foreign companies on the Vietnamese labor market, and of how
attractive Vietnam’s labor market is compared to India and China.
Education levels, productivity, wage levels, and number of strikes are among the
indicators that are used to compare the attractiveness of Vietnam’s labor market to
the labor markets of China and India. Furthermore the results of almost 30
interviews conducted with companies from Austria, Germany and Switzerland on
their experiences with doing business in Vietnam are used to shed light on the
strengths and weaknesses of the labor market in Vietnam.

Keywords

labor market, Vietnam, China, India, country evaluation, macroeconomics

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