2012 Student Research Conference:
25th Annual Student Research Conference

Foreign Direct Investment and Productivity Spillovers in Vietnam
Long Nguyen
Dr. Terry Olson, Faculty Mentor

Since the introduction of an economic reform in 1986, Vietnam has transformed itself from an isolated, centrally planned economy to one of the fastest-growing economies in the world. During this process, Vietnam has welcomed an influx of foreign direct investment which has played a significant role in its economic transformation. Making use of a panel dataset including 9 economic sectors, this paper attempts to examine the spillover effects of FDI on productivity growth in Vietnam for the period 1990-2002. The empirical results suggest that FDI exerted a positive impact on productivity in most of the sectors such as manufacturing, oil and gas, food, construction, hotels and tourism, and real estates. However, agriculture, transportation and communications, and other services experienced productivity decline. This can be explained by the limited absorptive capacity of these sectors, where problems such as large technology gap, low level of human capital, and underdeveloped infrastructure exist.

Keywords: economic growth, foreign direct investment, panel data, productivity, spillover effects, Vietnam

Topic(s):Economics

Presentation Type: Oral Paper

Session: 411-1
Location: MG 1098
Time: 2:30

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