FDI and Growth in Vietnam: A Critical Survey

Abstract

More than ever, countries at all levels of development seek to leverage FDI for development and adopt measures aimed at improving their investment climate. Despite the exhaustive literature on the topic however, results on growth effects of FDI still remain controversial. Notwithstanding the absence of any robust conclusions on the direction of causality between FDI and growth, most developing countries continue however to pursue policies aimed at encouraging more FDI inflows. This paper provides an overview of economic reforms related to foreign investment in Vietnam as well as the main trends and patterns of FDI inflows. It discusses the literature on FDI, summarizes the main studies which have analyzed the impacts in Vietnam and suggests some research directions.