Openness to trade, foreign direct investment, and economic growth in Vietnam

Ahn-Tu Nguyen; Sajid Anwar; Robert Alexander; Shih-Hao Lu

doi:10.1080/00036846.2021.2009112

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Openness to trade, foreign direct investment, and economic growth in Vietnam

Journal article

Peer reviewed

Openness to trade, foreign direct investment, and economic growth in Vietnam

Ahn-Tu Nguyen, Sajid Anwar, Robert Alexander and Shih-Hao Lu

Applied Economics, Vol.54(29), pp.3373-3391

2022

DOI: https://doi.org/10.1080/00036846.2021.2009112

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Abstract

Foreign Direct Investment

trade openness

autoregressive distributed lag

Vietnam

Using data over the period 1986 to 2020 and employing the Auto Regressive Distributed Lag bounds testing technique, we examine the linkages amongst economic growth, foreign direct investment (FDI), exports, and imports in Vietnam. The ARDL technique is particularly well-suited in the presence of a mixture of stationary and non-stationary variables. We find a long-run relationship indicating that FDI strongly promotes economic growth, but exports and imports do not have a statistically significant impact on growth. The robustness of these results is confirmed by a range of diagnostic tests and alternative methods of estimation. Additionally, the vector error correction model reveals that, in the short-run, both imports and exports have bidirectional Granger causality with FDI, while FDI has bidirectional Granger causality with economic growth in the long-run. Our findings suggest some policies to develop FDI to bolster economic growth.

Details

Title: Openness to trade, foreign direct investment, and economic growth in Vietnam
Authors: Ahn-Tu Nguyen (Author) - National Taiwan University of Science and Technology
Sajid Anwar (Author) - University of the Sunshine Coast, Queensland, Indigenous and Transcultural Research Centre - Legacy
Robert Alexander (Author) - University of the Sunshine Coast, Queensland, School of Business and Creative Industries
Shih-Hao Lu (Author) - National Taiwan University of Science and Technology
Publication details: Applied Economics, Vol.54(29), pp.3373-3391
Publisher: Routledge
DOI: 10.1080/00036846.2021.2009112
ISSN: 1466-4283
Organisation Unit: School of Business and Creative Industries; University of the Sunshine Coast, Queensland; Indigenous and Transcultural Research Centre
Language: English
Record Identifier: 99620507902621
Output Type: Journal article

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Web Of Science research areas: Economics

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