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Aid and Foreign Direct Investment in Vietnam


  • Wang, Chengang

    () (University of Bradford)

  • Balasubramanyam, V.N.

    () (Lancaster University)


This short paper explores the complementarity between foreign aid and foreign direct investment (FDI). Recent studies on aid concluded that aid should come to an end or be reduced with a radical modification of the terms and conditions and FDI and trade should replace aid as the engine of development. In this paper, we argue that aid complements FDI and advances the efficacy of FDI in promoting growth and development in the developing countries. Using data from the provinces in Vietnam, the statistical analysis suggests that aid has a positive impact on inflows of FDI and aid can complement FDI in promoting economic growth.

Suggested Citation

  • Wang, Chengang & Balasubramanyam, V.N., 2011. "Aid and Foreign Direct Investment in Vietnam," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 721-739.
  • Handle: RePEc:ris:integr:0556

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    Cited by:

    1. Kafayat Amusa & Nara Monkam & Nicola Viegi, 2016. "Foreign Aid and Foreign Direct Investment in Sub-Saharan Africa: A Panel Data Analysis," Working Papers 201642, University of Pretoria, Department of Economics.

    More about this item


    Foreign Direct Inverstment; Aid; Economic Growth; Vietnam;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations


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