The Influences of FDI, GFCF, OPEN on Vietnamese Economic Growth

Abstract

The aim of study is to research the influences of Foreign Direct Investment (FDI), Gross Fixed Capital Formation (GFCF), Trade Openness of the Economy (OPEN) on Vietnam economic growth. This study uses the annual data for the period 1986 to 2019, obtained from World Bank and Vietnam General Statistics Office. The study shows that FDI, GFCF and OPEN together influence to Vietnam economic growth in the period 1986 – 2019 at significant level of 5%; in which the FDI and GFCF determinants have influenced greatly. In the short–run, the results indicate that there are bidirectional causality relationships running between FDI and GDP, OPEN and GDP, OPEN and GFCF, and there are undirectional causality relationships running from GDP to GFCF, from GFCF to FDI, from FDI to OPEN. The study’s results confirm that FDI as more reliable and less violate source of capital and can extend the Vietnam economic growth. According to the study’s results, the authors suggest some recommendations to increase the Vietnam economic growth.