2.3. Operationalization of Backward Linkages and Technological Absorption Metrics
To rigorously assess how foreign direct investment shapes domestic supplier integration within host manufacturing economies, this research operationalizes inter-firm linkage mechanisms across horizontal and vertical dimensions. The empirical methodology differentiates horizontal, forward, and backward channels of technology and export spillovers using firm-level indicators. As established in the empirical literature on manufacturing in Vietnam, examining firm-level participation reveals whether export-oriented foreign enterprises generate spillovers through horizontal and forward linkages or whether domestic suppliers face persistent structural deficits in backward linkage formation (Anwar & Nguyen, 2008). Consequently, the quantitative architecture measures supplier engagement by distinguishing intermediate input purchases from intra-industry demonstration effects across multi-tiered supplier networks. Complementing this inter-firm transmission model, the analytical design incorporates a legal-institutional screening matrix to evaluate foreign investor control, ownership attribution, and regulatory accountability under European Union governance standards. Evaluating the regulatory impact of investment agreements requires precise conceptualizations of foreign direct investment thresholds, effective management participation, and indirect holding structures (Vermeulen, 2021). By synthesizing firm-level linkage metrics with institutional criteria derived from European investment screening frameworks, the research design systematically controls for complex ownership dynamics, indirect equity holdings, and cooperative arrangements among multinational enterprises acting in concert. This dual-track methodological framework ensures that the empirical evaluation of domestic technological capability upgrading accounts for both micro-level productive interactions and the macro-level regulatory provisions governing foreign capital entry, contractual transparency, screening enforcement, and corporate compliance across global value chains.