The impacts of FDI and trade openness on economic growth - Evidence from Vietnam
Abstract
Over three decades of accelerating the Renovation (Doi Moi) progress,
Vietnam has shown remarkable achievements in economic growth, increased per capita
income, poverty reduction, and so on. In which, the mobilization and attraction of
domestic and foreign capital sources have shown some significant contributions. The
thesis is an attempt to scrutinize the long-term as well as short-term impacts of Foreign
Direct Investment (FDI) and Trade Openness on Vietnam's Economic Growth. Within
the scope of the thesis, annual time series data from 1986 to 2018 was employed using
Autoregressive Distributed Lag Approach (ARDL) and Error Correction Model
(ECM). The empirical findings suggest that both FDI and Trade have significant
influence on Economic Growth. While FDI exerts positive effect on Economic Progress
of Vietnam both in long-run and short-run, Trade Openness, surprisingly, poses a
reverse impact. Therefore, several recommendations have been made for policymakers
to create better development strategies in the future.