Locational Determinants of Foreign Direct Investment in the Vietnamese Economy

2019 ◽  
pp. 422-459
Author(s):  
Ngoc Le ◽  
Xiaoqing Li ◽  
Andrey Yukhanaev
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Quantitative Research ◽  
Global Financial Crisis ◽  
Secondary Data ◽  
Labor Cost ◽  
Policy Implications ◽  
Fdi Inflows ◽  
Rapid Economic Growth ◽  
The Global Financial Crisis

This chapter investigates the determinants of inward Foreign Direct Investment (FDI) in the Vietnamese economy and their connection to the rapid economic growth the country has experienced. Using the concepts drawn from the extant Ownership-Location-Internalization (OLI) paradigm and Institutional-Based View (IBV) literature, and adopting a quantitative research with the application of secondary data analysis, the study found seven significant locational factors determining FDI inflows into the Vietnamese economy, such as business freedom, market size, labor cost, trade freedom level, inflation rate, human capital, and the effectiveness of property rights. Political risk, monetary freedom, corruption, the country's WTO accession, and the global financial crisis are found to be irrelevant to the inbound investments in the modern economy. A macro-level account and the policy implications are suggested for the promotion of FDI inflows into Vietnam to ensure the country's continuous and sustainable economic development.

Locational Determinants of Foreign Direct Investment in the Vietnamese Economy

2015 ◽  
pp. 1-36 ◽  
Author(s):  
Ngoc Le ◽  
Xiaoqing Li ◽  
Andrey Yukhanaev
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Quantitative Research ◽  
Global Financial Crisis ◽  
Secondary Data ◽  
Labor Cost ◽  
Policy Implications ◽  
Fdi Inflows ◽  
Rapid Economic Growth ◽  
The Global Financial Crisis

This chapter investigates the determinants of inward Foreign Direct Investment (FDI) in the Vietnamese economy and their connection to the rapid economic growth the country has experienced. Using the concepts drawn from the extant Ownership-Location-Internalization (OLI) paradigm and Institutional-Based View (IBV) literature, and adopting a quantitative research with the application of secondary data analysis, the study found seven significant locational factors determining FDI inflows into the Vietnamese economy, such as business freedom, market size, labor cost, trade freedom level, inflation rate, human capital, and the effectiveness of property rights. Political risk, monetary freedom, corruption, the country's WTO accession, and the global financial crisis are found to be irrelevant to the inbound investments in the modern economy. A macro-level account and the policy implications are suggested for the promotion of FDI inflows into Vietnam to ensure the country's continuous and sustainable economic development.

scholarly journals Dose the FDI Flow into Arab Region Influenced by the Global Financial Crisis?

2020 ◽  
Vol 2 (1) ◽  
pp. p9
Author(s):  
Omar Ghazy Aziz
Keyword(s):  
Foreign Direct Investment ◽  
Financial Crisis ◽  
Direct Investment ◽  
Global Financial Crisis ◽  
Case Analysis ◽  
Arab Country ◽  
Arab Countries ◽  
Fdi Inflows ◽  
Arab Region ◽  
The Global Financial Crisis

This study provides an overall view of the Foreign Direct Investment (FDI) inflows for the Arab region during the global financial crisis (GFC) in 2008. There a little attention has given to the FDI flows in Arab region as the main focus was on the countries where the GFC started. The objective of this study is to compare and analyses the global FDI inflows with Arab region during the GFC. It attempts to answer the question whether the FDI flow into Arab region was impacted immediately by the GFC? It provides a case analysis of FDI inflows in the Arab countries to test what is the reduction in these inflows? Are FDI inflows hold due to the assumption of that the region is considered as preferable distention to FDI? The study gives better understanding to the share of each individual Arab country over the period. It also introduces a case analysis of FDI inflow for Arab countries then compare it with other global regions.

scholarly journals Agricultural Sector FDI and Economic Growth in Saarc Countries

2019 ◽  
Vol 8 (2S10) ◽  
pp. 116-121
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Agricultural Sector ◽  
South Asians ◽  
Secondary Data ◽  
Agricultural Products ◽  
Fdi Inflows ◽  
Important Relationship ◽  
The Relationship

The study seeks to establish the relationship between foreign direct investment to Saarc region agricultural sector and economic growth with secondary data. SAARC comprises 3% of the world's area, 21% of the world's population and 3.8% (US$2.9 trillion) making up a total of 3% of the world’s area. The country has second in all over the world in terms of agriculture position. The population obliquely all of the member states is over 1.7 billion, accounting for 21% of the world’s total population. In their 42% of the agricultural operation in SAARC nations and also 51% source of livelihood of the South Asians. The study has revealed that India alone accounts for 52 per cent of the agricultural products using the SAARC region peoples. For the present study, a total of 34 groups related to the agricultural products were selected out of the total groups. The techniques employed to analyze the data include descriptive statistic, correlation and linear forecast method. The study also revealed a positive and important relationship between economic growth and foreign direct investment flow to the agricultural sector. Thus, the study recommends that policy should focus on flexible trade policies to attract more foreign direct investment (FDI) inflows to SAARC nations. i.e. Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, Sri Lanka including India

Understanding foreign direct investment in Indonesia

2016 ◽  
Vol 15 (1) ◽  
pp. 28-50 ◽  
Author(s):  
Sasidaran Gopalan ◽  
Rabin Hattari ◽  
Ramkishen S. Rajan
Keyword(s):  
Foreign Direct Investment ◽  
Data Analysis ◽  
Direct Investment ◽  
Policy Implications ◽  
Fdi Inflows ◽  
Content Type ◽  
Greenfield Investments ◽  
The Government ◽  
Data Investigation ◽  
Existing Data

Purpose This paper aims to examine the dynamics of foreign direct investment (FDI) inflows into Indonesia. It is interested specifically in analysing and deliberating on two important policy questions: First, are all kinds of FDI useful from a policy perspective and what does the existing data on FDI reveal about the type of FDI inflows into Indonesia? Second, does the existing data help understand the extent of de facto bilateral linkages between Indonesia and other countries? Design/methodology/approach The paper offers an in-depth case study of Indonesia using extensive exploratory data analysis on FDI inflows into Indonesia. As discussed in the paper, the data investigation uses and reconciles available FDI data both from national and international sources to understand the usefulness of such data for policy analysis. Findings A data investigation of the trends in different types of FDI flows reveals a discernible downward trend in the ratio of mergers and acquisitions (M&A)–FDI ratio over the years. The paper argues that from a sequencing perspective, while a medium-to-long-term framework encouraging both domestic and foreign Greenfield investments could help Indonesia regain its growth luster, in the near term much more attention needs to be paid to FDI inflows in the form of M&As. Further, reconciling FDI and M&A data might help identify the original sources of FDI flows because existing data are based on flow of funds rather than ultimate ownership. Practical implications Since the Asian financial crisis, Indonesia has successfully embarked on a phase of economic and political transition post-Suharto, with the cornerstones of such a strategy being a process of greater democratisation and decentralisation. However, there have been growing concerns of economic growth stagnation in recent years. One of the policies to revive the economy’s lustre adopted by the government has been to attract greater FDI inflows. In this light, this paper examines the dynamics of FDI into Indonesia and deliberates on what kinds of FDI policymakers should focus on attracting to restore the country’s growth lustre. Originality/value The question of whether a policy to attract FDI should be careful in distinguishing the kind of FDI it wants to attract has not been sufficiently addressed in the related literature. This paper provides a framework to understand the different macroeconomic policy implications of types of FDI and provides extensive data analysis to not only understand the types of FDI but also sources of bilateral FDI inflows to Indonesia by reconciling FDI and M&A data.

Do surges in foreign direct investment inflows lead to surges in economic growth? Evidence from developing countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jagadish Prasad Sahu
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Domestic Investment ◽  
Fdi Inflows ◽  
Content Type ◽  
Regression Methods ◽  
Recursive Bivariate Probit ◽  
Rapid Economic Growth

Purpose The purpose of this paper is to examine whether surge in foreign direct investment (FDI) inflows leads to surge in economic growth in 52 developing countries for the period 1990-2014. Design/methodology/approach The author used a threshold approach to identify surge incidences in gross domestic product (GDP) per capita growth rates and FDI inflows (measured as percentage of GDP) for each country included in the sample. Three different criteria are used to identify surge instances. As a preliminary analysis the author used the probit and complementary log–log regression methods to estimate the likelihood of growth surge occurrence. To correct the potential endogeneity problem the author jointly estimated the growth surge and FDI surge equations using the recursive bivariate probit (RBP) regression. Findings The author found that East Asia and the Pacific region has highest rate of growth surge incidences followed by South Asia. The results suggest that surge in FDI inflows significantly increases the likelihood of growth surge. The finding is robust to alternative surge definitions and methods of estimation. Practical implications The analysis reveals that inbound FDI flow is a critical driver of economic growth in developing countries. Large FDI inflows matters for achieving rapid economic growth. Therefore developing countries should adopt favourable policies to attract more FDI. Policymakers should focus on improving the investment climate of the country to boost domestic investment and to attract larger amount of FDI into the economy. Originality/value To the best of the author’s knowledge this is the first study to examine whether surge in FDI inflows stimulates surge in economic growth in developing countries. The analysis reveals that FDI surge is a robust predictor of rapid economic growth in developing countries.

Determinants of Net Interest Margin of Commercial Banks in Vietnam

2015 ◽  
pp. 69-82 ◽  
Author(s):  
Khanh Hoang Trung ◽  
Tra Vu Thi Dan
Keyword(s):  
Commercial Banks ◽  
Global Financial Crisis ◽  
Least Squares Method ◽  
Secondary Data ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Financial Reports ◽  
Net Interest Margin ◽  
The Global Financial Crisis ◽  
Interest Margin

This study provides an insight into the determinants of net interest margin (NIM) of commercial banks in Vietnam during the recession period. We employ secondary data collected from published audited consolidated financial reports of Vietnamese commercial banks from 2008, the year marking the outbreak of the global financial crisis, to the end of 2012. Altogether, the data constitute 175 panel-data observations. The regression using the ordinary least squares method yields the result that operating expense, management quality, risk aversion, and inflation rate have a positive effect on NIM, while the banking sector’s market concentration affects NIM negatively. Afterwards, some policy implications are derived from those findings to mitigate and put NIM under control, so that the efficiency of the financial intermediary system can be developed.

scholarly journals The Causal Link between FDI and Remittances in Kosovo, Switzerland, and Denmark

2021 ◽  
Vol 24 (2) ◽  
pp. 45-68
Author(s):  
Kida Nakije
Keyword(s):  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Secondary Data ◽  
Wald Test ◽  
Ordinary Least Squares ◽  
Business Environment ◽  
Causal Link ◽  
Population Number ◽  
Fdi Inflows

The pursuit of money and capital is a relentless endeavor of every economy. FDI is considered the engine of economic growth, while are remittances the increasingly the catalyst of the population’s welfare. The purpose of the study is to analyze the answer about the relationship between remittances and FDI inflows in Kosovo, Switzerland and Denmark. Secondary data obtained from the World Development Indicators were, analyzed with the Ordinary Least Squares model and Granger Causality and processed with SPSS 21 technique. Measuring the correlation between variables, Foreign Direct Investment, GDP per capita growth, net migration, remittances, Gross Fixed Capital Formation, household consumption, and population number, give reliable results. Using remittances as a dependent variable, the first hypothesis has been partially confirmed, the most statistically significant and positive determinants that increase remittances are population, unemployment and migration and not other determinants. The regression results are unsatisfactory for the second hypothesis dependent variables Foreign Direct Investment the determinants are positive but not statistically significant, confirming that there are other factors that impact the increase of FDI inflows. The correlation matrix shows a high correlation between the variables. The Granger Causality model, through the Wald test, represents the cause. FDI does not cause remittances, but remittances cause FDI. A limitation of the study is the heterogeneity of the data and the countries in the sample. The results of the study will be of interest to government institutions in Kosovo to improve the business environment so that the country will become attractive to foreign investors who will bring capital and employment growth.

EVIDENCE ON TWO-WAY RELATIONSHIPS BETWEEN FOREIGN DIRECT INVESTMENT INFLOWS AND COUNTRY-LEVEL INDIVIDUAL GOVERNANCE INDICATORS

2013 ◽  
Vol 58 (02) ◽  
pp. 1350013 ◽  
Author(s):  
OMAR AL FAROOQUE ◽  
SUBBA REDDY YARRAM
Keyword(s):  
Foreign Direct Investment ◽  
Financial Reporting ◽  
Direct Investment ◽  
Business Environment ◽  
Policy Implications ◽  
Legal Origin ◽  
Global Business ◽  
Fdi Inflows ◽  
Country Level ◽  
Governance Indicators

This paper investigates the interactions between foreign direct investment (FDI) and country-level individual governance indicators for a sample of 173 countries from 1996 to 2007, and also the effect of legal origin, international financial reporting standards (IFRS) and ownership diffusion on them. We find evidence of positively significant two-way relationships between each of the six individual governance indicators and lagged FDI inflows scaled by lagged GDP to confirm that governance is a function of FDI inflows and vice-versa. The overall interpretation of the results is that FDI inflows, IFRS, ownership diffusion and legal framework of a country 'matter' for macro-level governance in a competitive global business environment while FDI inflows are dependent on individual governance indicators and other macro-economic variables to a large extent. Both IFRS and legal origin have no direct link to FDI inflow. These findings have policy implications for individual governments and international donor organizations to undertake tenable actions for the improvement of country-level individual governance indicators to attract more FDI inflow.

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