The Impact of Foreign Direct Investment on Economic Growth: A Case Study in Vietnam 1990 – 2015

Abstract

Over the past 20 years, the role of FDI in the Vietnamese economy has been important. FDI is one of the essential factors for the domestic economic growth. FDI not only increases the supply of investment capital but also promotes technology transfer, human capital accumulation, which promotes long-term economic growth. This paper employs time series techniques to analyses the effect of the foreign direct investment on economic growth in Viet Nam. The study uses annual data over the period 1990 - 2015. The gross domestic product (GDP) is the dependent variable, and foreign direct investment (FDI), gross fixed capital formation, real exchange rate, real interest rate, and inflation rate are the explanatory variables.

Keywords: Gross domestic product, foreign direct investment, gross fixed capital formation,