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Foreign direct investment and economic growth in Vietnam

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  • Sajid Anwar
  • Lan Phi Nguyen

Abstract

By making use of a recently released panel dataset that covers 61 provinces of Vietnam from 1996–2005, this study examines the link between foreign direct investment and economic growth. Our analysis, which is based on a simultaneous equations model, reveals that in overall terms a mutually reinforcing two-way linkage between FDI and economic growth exists in Vietnam. However, this is not the case for each and every region of Vietnam. The results presented in this study suggest that the impact of foreign direct investment on economic growth in Vietnam will be larger if more resources are invested in education and training, financial market development and in reducing the technology gap between the foreign and local firms.

Suggested Citation

  • Sajid Anwar & Lan Phi Nguyen, 2010. "Foreign direct investment and economic growth in Vietnam," Asia Pacific Business Review, Taylor & Francis Journals, vol. 16(1-2), pages 183-202.
  • Handle: RePEc:taf:apbizr:v:16:y:2010:i:1-2:p:183-202
    DOI: 10.1080/10438590802511031
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    File URL: http://hdl.handle.net/10.1080/10438590802511031
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    References listed on IDEAS

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    1. Philippe Aghion & Diego Comin & Peter Howitt & Isabel Tecu, 2016. "When Does Domestic Savings Matter for Economic Growth?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(3), pages 381-407, August.
    2. Nguyen, Ngoc Anh & Nguyen, Thang, 2007. "Foreign direct investment in Vietnam: An overview and analysis the determinants of spatial distribution across provinces," MPRA Paper 1921, University Library of Munich, Germany.
    3. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
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