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Foreign direct investment and endogenous growth in Vietnam


  • Tam Bang Vu


Foregin Direct Investment's (FDI's) contribution to growth has been a controversial topic in economic literature and appears to be country specific. In this article, we use time-varying coefficients in an augmented production function and let FDI indirectly affect Gross domestic product growth through labour productivity. This approach creates built-in heteroskedasticity, so the feasible generalized least square estimation is employed. The results show that FDI has significant and positive effect on labour productivity and economic growth in Vietnam, but the effect is not equally distributed among economic sectors.

Suggested Citation

  • Tam Bang Vu, 2008. "Foreign direct investment and endogenous growth in Vietnam," Applied Economics, Taylor & Francis Journals, vol. 40(9), pages 1165-1173.
  • Handle: RePEc:taf:applec:v:40:y:2008:i:9:p:1165-1173
    DOI: 10.1080/00036840600749433

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    References listed on IDEAS

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    Cited by:

    1. Noy, Ilan & Vu, Tam Bang, 2010. "The economics of natural disasters in a developing country: The case of Vietnam," Journal of Asian Economics, Elsevier, vol. 21(4), pages 345-354, August.
    2. Gueorguiev, Dimitar & Malesky, Edmund, 2012. "Foreign investment and bribery: A firm-level analysis of corruption in Vietnam," Journal of Asian Economics, Elsevier, vol. 23(2), pages 111-129.
    3. repec:bpj:glecon:v:13:y:2017:i:1:p:8:n:3 is not listed on IDEAS
    4. Dinh Hong Linh & Shih-Mo Lin, 2014. "CO2 Emissions, Energy Consumption, Economic Growth and FDI in Vietnam," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 12(3 (Fall)), pages 219-232.
    5. Temiz, Dilek & Gökmen, Aytaç, 2014. "FDI inflow as an international business operation by MNCs and economic growth: An empirical study on Turkey," International Business Review, Elsevier, vol. 23(1), pages 145-154.

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