Institution Matter for Technological Changes in Transition Economy: A Comparison Between Japanese FDI and Private Enterprises in Vietnam

Abstract

Institutions and technological changes have close-knit relationship. Institution can create constraints and incentives that have significant effects on the path of technological change. Especially, this issue attracts a lot of discussion in transition economies. Because technology plays an important role in economic growth and helps these countries catch up with developed countries more quickly. Vietnam- a transition economy- has had many policies which were aimed at promoting technological change. However, they have not really created incentives for the issues in enterprises. This paper is aimed at dealing with this problem thanks to institutional theory. Besides, we also mention similarities and differences between Japanese FDI enterprises and private enterprises in Vietnam by institutional theory. We begin with a brief overview of the economics of technological changes, and then examine theory and empirical evidence on case studies (Japanese FDI enterprises and private enterprises in Vietnam). Finally, we suggest some recommendations which based on results of research for Government and enterprises.

Keywords: Technology change, institution matter, transition economy

JEL Classification: O12, O19, 03, P2, P3, K4