Political ties and performance of multinational corporations in Vietnamese emerging market

Local governments play a key role in attracting foreign investment and the operations of multinational

corporations (MNCs) in Vietnam, yet limited research has focused on the emerging issues in this

context. This study adopted a mixed-methods approach. Representatives of MNCs in Ho Chi Minh

City and four provinces participated in this research. Partial least squares structural equation modelling

was used to analyze the data and test the model. The results reveal both direct and indirect relationships

between political ties, institutional support, opportunity recognition and firm performance.

Recommendations for the local governments are discussed in detail.

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Political ties and performance of multinational corporations in Vietnamese emerging market
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Appendix A 
Table A1 
Measurement scale. 
Variable (Code) Item Adapted and modified 
from previous studies or 
self-developed 
Managerial political 
ties (MPT) 
Political leaders at various levels of the government. (MTP1) (Li & Zhou, 2010) 
Officials in industrial bureaus. (MTP2) 
Officials in regulatory and supporting organizations such as tax 
bureaus, state banks, commercial administration bureaus, and the 
like (MTP3) 
Institutional support 
(IS) 
The government often implements policies and programs beneficial 
to our operations (IS1) 
(Guo et al., 2014; Li & 
Zhou, 2010) 
The government provides us with much useful information. (IS2). 
The government often helps us obtain licenses such like an import 
license or a technical license (IS3) 
The government provides us with securing local resources such as 
land, electricity, and human resources (IS4). 
Opportunity 
Recognition (OR) 
Recognizing opportunities from the new establishment or the 
adjustment of industrial policies and planning (OR1) 
(Guo et al., 2014) 
Recognizing opportunities by communicating with government 
officials (OR2) 
Recognizing opportunities from new free trade agreements in 
Vietnam (OR3) 
Developed from the in-
depth interviews 
We have well prepared to predict the outcome of the upcoming 
trade agreements (OR4) 
Regulatory Legitimacy 
(RL) 
What we do are authorized by the government (RL1) (Guo et al., 2014) 
What we do confirm with the policies, rules and regulations (RL2) 
What we do correspond to the government's thinking of possible 
policy adjustments (RL3) 
What we do often become industrial templates as recommended by 
the government (RL4). 
Training activities 
(TA) 
Training for fire protection (TA1) Developed from the in-
depth interviews Training on labor safety (TA2) 
Informing new policies for FDI firms (ex post facto) (TA3) 
Providing information about the commitment of trade and market 
information (TA4) 
Informing the transparency of information and policies related to 
business (TA5) 
Organizing business seminars and business meetings (TA6) 
Firm performance 
(FP) 
Market share growth (FP1) (Guo et al., 2014; Jayaram 
& Tan, 2010) Sales growth (FP2) 
Profit growth (FP3) 
Return on assets (FP4) 
Product quality (FP5) 
Customer service level (FP6) 
 258
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