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Electronics FDI, EVFTA and Domestic Supplier Upgrading, Governance and Equity

The integration of electronics foreign direct investment within the EVFTA regulatory architecture creates distinct governance dynamics between multinational lead firms and host-country industrial suppliers. Asymmetric buyer-supplier hierarchies and varying equity configurations significantly condition technological transfer, absorptive capacity, and functional upgrading. Structural alignment between trade-agreement disciplines and domestic capability building is essential for ensuring equitable value distribution and sustainable industrial participation.

Mục tiêu bài làm

Examine how electronics FDI governance structures and EVFTA provisions determine the upgrading pathways of domestic suppliers.

Phương pháp luận

Desk-based comparative institutional synthesis of GVC literature, investment datasets, and EVFTA legal chapters.

Tính mới khoa học

Connects EVFTA investment disciplines with superstar lead firm governance to evaluate local electronics supplier equity.

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Scientific Article

Degree:
Electronics FDI, EVFTA and Domestic Supplier Upgrading, Governance and Equity

Author:

Group

First M. Last

Advisor:

Dr. First Last

City, 2026

Contents

Introduction
Tóm tắt và Từ khóa (Abstract and Keywords)
Đặt vấn đề: Global Value Chains and Investment Governance in Electronics
Conceptualizing FDI Modes, Superstar Firms, and Value Chain Upgrading
EVFTA Regulatory Mechanisms, Investment Disciplines, and Domestic Sourcing Provisions
Phương pháp: Analytical Design and Secondary Empirical Synthesis
Kết quả: Patterns of Equity vs Non-Equity Electronics FDI Inflows
Bàn luận: Lead Firm Dominance, Relational Governance, and Domestic Supplier Upgrading
Institutional Equity, Technological Spillovers, and Strategic Industrial Upgrading
Policy Frameworks for Deepening Local Linkages Under Preferential Trade Regimes
Kết luận (Conclusions and Strategic Roadmap)
Tài liệu tham khảo (References)

Introduction

Global value chains in the electronics sector are increasingly organized through concentrated multinational networks that govern capital, technology, and relational trade flows [1]. Preferential trade frameworks such as the European Union-Vietnam Free Trade Agreement (EVFTA) alter cross-border investment incentives by coupling market access with strict rules of origin, intellectual property standards, and sustainable trade requirements [4].

Despite heavy inward foreign direct investment, host-economy domestic suppliers encounter asymmetric power structures established by superstar firms and tiered contract manufacturers [2]. Lead-firm procurement architectures often lock local enterprises into low-margin assembly functions, limiting technological absorption, value capture, and structural industrial upgrading across the broader domestic manufacturing ecosystem [3].

This study evaluates how investment governance structures and equity versus non-equity FDI modalities interact with EVFTA provisions to influence the technological trajectory of domestic electronics suppliers. By synthesizing value-chain governance theory with institutional trade policy analysis, it identifies the regulatory and contractual conditions necessary to enhance domestic supplier upgrading and equitable value distribution.

Bàn luận: Lead Firm Dominance, Relational Governance, and Domestic Supplier Upgrading

The structural organization of electronics global value chains reflects asymmetric governance hierarchies that condition the integration and upgrading pathways of domestic suppliers. Superstar multinational enterprises deploy both equity and non-equity investment modes to coordinate transnational production, which significantly shapes host-country technological spillovers and firm-level productivity dynamics (Foreign Direct Investment in the Context of Global Value Chains and Superstar Firms, 2021). While foreign direct investment inflows generate initial opportunities for local participation, the monopolistic attributes and relational governance strategies of dominant lead firms often limit the scope of local functional upgrading. Domestic suppliers frequently encounter substantial relational costs and distributional disparities that restrict their role to low-tier assembly tasks, thereby hindering technological absorption and indigenous innovation under preferential trade disciplines. Concurrently, the emergence of advanced digital business models and automated production systems alters the spatial distribution and coordination of international investment flows within global value chains (IMPACT OF INDUSTRY 4.0 ON GLOBAL VALUE CHAINS, BUSINESS MODELS AND FOREIGN DIRECT INVESTMENT, 2021). These technological shifts intensify lead firm requirements regarding precision and quality standards, making supplier upgrading dependent on deliberate institutional support and enhanced absorptive capabilities. Within the regulatory framework of the EU-Vietnam Free Trade Agreement, standard investment rules alone remain insufficient to bridge the capability divide between multinational enterprises and domestic firms. Host-country policy frameworks must actively address the underlying relational friction and equity imbalances by fostering direct technological spillovers, encouraging high-value joint ventures, and establishing targeted domestic sourcing mechanisms that empower local suppliers to transition from dependent contract manufacturers into technologically autonomous industrial partners.

References

  1. IMPACT OF INDUSTRY 4.0 ON GLOBAL VALUE CHAINS, BUSINESS MODELS AND FOREIGN DIRECT INVESTMENT
    D. Mukha
    Liên kết DOI
  2. Foreign Direct Investment in the Context of Global Value Chains and Superstar Firms
    Kasper Vrolijk
    Liên kết DOI
  3. The “Fox–Apple” Partnership in the Global Value Chain: How Did Foreign Direct Investment and Contract Manufacturing Reshape the Landscape of the Electronics Industry?
    Guoyong Liang
    Liên kết DOI
  4. Foreign Direct Investment and Global Value Chains
    Christine Zhenwei Qiang, Yan Liu, Victor Steenbergen
  5. Figure 2.18. FDI investment and integration in global value chains

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Electronics FDI, EVFTA and Domestic Supplier Upgrading, Governance and Equity | Bài báo | Aicademy