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Foreign Direct Investment and Exports: the Experiences of Vietnam




We examined the implementation statuses of a total of 5,919 foreign direct investment projects approved by the Vietnamese Ministry of Planning and Investment since 1988, and compiled a database of actually disbursed FDI in Vietnam. The database covers FDI flows into Vietnam from 23 countries from 1990 to 2004. Using the data, we analyzed the impact of FDI on the exports of Vietnam with gravity equations. The empirical results demonstrate that FDI is one of major factors driving the rapid export growth of Vietnam. A one per cent increase in FDI inflows will be expected to give rise to 0.25 per cent increase in exports. The results are robust under different specifications.

Suggested Citation

  • Nguyen Thanh Xuan & Yuqing Xing, 2006. "Foreign Direct Investment and Exports: the Experiences of Vietnam," Working Papers EMS_2006_13, Research Institute, International University of Japan.
  • Handle: RePEc:iuj:wpaper:ems_2006_13

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    References listed on IDEAS

    1. Portes, Richard & Rey, Helene, 2005. "The determinants of cross-border equity flows," Journal of International Economics, Elsevier, vol. 65(2), pages 269-296, March.
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    3. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-481, August.
    4. XING, Yuqing, 2006. "Why is China so attractive for FDI? The role of exchange rates," China Economic Review, Elsevier, vol. 17(2), pages 198-209.
    5. James E. Anderson & Eric van Wincoop, 2001. "Borders, Trade and Welfare," Boston College Working Papers in Economics 508, Boston College Department of Economics.
    6. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    7. World Bank, 2006. "World Development Indicators 2006," World Bank Publications, The World Bank, number 8151, June.
    8. Yuqing Xing & Guanghua Wan, 2006. "Exchange Rates and Competition for FDI in Asia," The World Economy, Wiley Blackwell, vol. 29(4), pages 419-434, April.
    9. Barry Eichengreen & Yeongseop Rhee & Hui Tong, 2004. "The Impact of China on the Exports of Other Asian Countries," NBER Working Papers 10768, National Bureau of Economic Research, Inc.
    10. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
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    Cited by:

    1. Syed Imran Ali Meerza, 2012. "Causal links between trade, foreign direct investment and economic growth for Bangladesh," SDSU Working Papers in Progress 12012, South Dakota State University, Department of Economics.
    2. Elisa Giuliani & Chiara Macchi, 2013. "Multinational Corporations’ Economic And Human Rights Impacts On Developing Countries: A Review And Research Agenda," Discussion Papers 2013/158, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

    More about this item


    FDI; Exports; Gravity; Vietnam;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business


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