The Influence of FDI on an Economy As Overall in Vietnam (2006 – 2015)

Abstract

Over a decade, the Foreign Direct Investment (FDI) has played a crucial role in most countries especially developing countries, especially Vietnam in terms of economics’ performance. Many scholars and economists have believed that Foreign Direct Investment will provide a benefit to the host countries. Consequently, this essay aims to examine the influence of FDI on particular economics' indicators those are employment or job creation, unemployment, international trade as well as stock market performance. With the regression model, this essay has found out that FDI assists the country's economy except the export. While the government also imposed the favored policies comprised of eliminating the import tariff to attract more foreign investment since the government has believed that the foreign investment will assist them to achieve the objective, which is the transition to be an export-led for a labor-intensive manufacturer. Fortunately, since 1988 Vietnam has become one of the world largest labor-intensive manufacturers. This finding shows that FID and economic growth have a strong relationship with each other with the factors directly related which will be mentioned below.