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The impact of foreign capital inflows on poverty in Vietnam: An empirical investigation

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  • Musakwa Mercy T.

    (University of South Africa, South Africa)

  • Odhiambo Nicholas M.

    (University of South Africa, South Africa)

  • Nyasha Sheilla

    (University of South Africa, South Africa)

Abstract

This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure.

Suggested Citation

  • Musakwa Mercy T. & Odhiambo Nicholas M. & Nyasha Sheilla, 2021. "The impact of foreign capital inflows on poverty in Vietnam: An empirical investigation," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 7(2), pages 31-49, December.
    • Handle: RePEc:vrs:crebss:v:7:y:2021:i:2:p:31-49:n:4
    DOI: 10.2478/crebss-2021-0008
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    More about this item

    Keywords

    autoregressive distributed lag (ARDL); external debt; foreign direct investment; poverty; Vietnam;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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