Does Foreign Direct Investment Promote Economic Growth in Vietnam?

This study examines the effects of the foreign direct investment (FDI) on economic growth in Vietnam by using the panel data model across Vietnam’s sixty-one provinces in 1995–2006. The study shows that there is a strong and positive effect of FDI on economic growth in Vietnam as a channel of increasing the stock of capital. Human capital and trade in Vietnam are not yet the channels that give access to advance technology and knowledge transfers from FDI inflows to increase Vietnam’s economic growth.