The Role of FDI in Economic Development in Vietnam + 5 Nations: Empirical Evidence between 1986–2020

The Role of FDI in Economic Development in Vietnam + 5 Nations: Empirical Evidence between 1986–2020

This research work aims to investigate the role of FDI in Economic Development by assessing its relationship with GDP per capita in Vietnam +5 from 1986–2020. Through descriptive statistical, correlation matrix analysis, and econometric models, including Vector Error Correction Model (VECM) and Feasible Generalized Least Squares (FGLS) estimation methods using Stata 15.1. The VECM estimation method results show that FDI positively impacts Economic Development in the short run while not finding a long-run relationship. In addition, it is found that a clear relationship between Exports and Economic Development in both the short run and the long run. Meanwhile, CO2 emissions and Employment Opportunities have no clear relationship with Economic Development in the short run. However, the relationship is reversed in the long run, as the empirical study in Vietnam. The results of the FGLS estimation method show that FDI, CO2 emissions, and Exports have a significant and positive impact on Economic Development in five selected Southeast Asian countries without Employment Opportunities in the long run. From these findings, the author proposes some policy implications of attaching FDI to sustainable Economic Development in Vietnam next time.