Can foreign direct investment and economic growth drive Vietnam’s export expansion?

The purpose of this study is to evaluate the impact of foreign direct investment (FDI) and economic growth (GDP per capita) on Vietnam’s export performance over the period from 1996 to 2023. Employing a quantile regression approach alongside the traditional OLS method, the research aims to explore how these effects vary across different levels of export distribution. The findings reveal that GDP per capita has a consistently positive and statistically significant impact on exports across most quantiles (particularly from Q20 to Q90) and in the OLS model. This underscores the critical role of economic development and national production capacity in enhancing export performance. In contrast, the influence of FDI is found to be heterogeneous and less stable. In the lower quantiles (Q10 to Q70), the effect of FDI is largely insignificant or even negative. However, at higher quantiles particularly Q80, FDI exhibits a strong, positive, and highly significant impact. This indicates that FDI contributes more effectively to export growth when the economy reaches a higher level of development and absorptive capacity. Overall, the study highlights the asymmetric effects of FDI and GDP on exports and underscores the importance of tailored policy interventions based on the stage of economic development.