Macroeconomic Determinants of Inward Foreign Direct Investment in Vietnam: Johansen Cointegration Approach
(Pages 536-543)Trung Vu Tran*
Faculty of Economics and Management, Thuyloi University, 175 Tay Son, Dong Da, Hanoi, Vietnam.
DOI: https://doi.org/10.55365/1923.x2023.21.55
Abstract:
In this study, the impacts of macroeconomic factors, namely economic growth, trade openness, economic stability (inflation), cost of capital (real interest rate) and VND/USD exchange rate, on inward foreign direct investment (FDI) in Vietnam during the period of 1996 – 2021 have been examined. All relevant data are collected from World Development Indicators of the World Bank. The methodology is an Augmented Dickey-Fuller test for examining integration orders, a Johansen cointegration approach for the long-run relationship and a Granger causality test for the short-run relationship. The findings show that in the long run, GDP growth and trade openness have positive impacts, exchange rate has negative impact on the FDI inflow. Furthermore, trade openness and exchange run affect the inward FDI in the short run.
Keywords:
FDI inflow, economic growth, trade openness, exchange rate, cointegration, Vietnam.
How to Cite:
Trung Vu Tran. Macroeconomic Determinants of Inward Foreign Direct Investment in Vietnam: Johansen Cointegration Approach. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a55/
Licensee REF Press This is an open access article licensed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, provided the work is properly cited.