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http://dx.doi.org/10.13106/jafeb.2020.vol7.no6.117

Investigating Foreign Direct Investment Attractive Factors of Korean Direct Investment into Vietnam  

TA, Van Loi (School of Trade and International Economics, National Economics University)
LE, Quoc Hoi (Journal of Economics and Development, National Economics University)
NGUYEN, Thi Lien Huong (International Trade Department, School of Trade and International Economics, National Economics University)
PHAN, Thuy Thao (Economics Department, Faculty of Economics and Management, Thuy Loi University)
DO, Anh Duc (School of Trade and International Economics, National Economics University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.6, 2020 , pp. 117-125 More about this Journal
Abstract
This paper aims to investigate FDI attractive factors, which are important to formulate policies to attract Korean direct investment into Vietnam. Based on the literature review and the results of interview with 27 Korean investors in Vietnam, we determined the model of variables attracting Korea's FDI into Vietnam. It is used to assess the impact of attractive factors belonging to three groups of variables to support investment decision; they are macroeconomics variables (including market size factor, labor cost factor, and market openness factor), policies variables (including monetary policy factor and tax rate gap factor), and microeconomics variables (geographic advantage factor representative by location). This research also utilized a relatively new quantitative research method based on the Autoregressive Distributed Lag model (ARDL) with the time data chain from 1995 to 2017 of Korean FDI into Vietnam. It analyzes long-term relationships between dependent variables and independent variables. The result of this study indicates that there are three positive factors (low wages, trade openness and government policy) explaining the FDI flows in the long term. The result also shows that incentive tax policy has had a positive impact on Korean FDI, which has satisfied the aim of seeking efficiency of Korean investors.
Keywords
FDI; Attracting Factors; Korea; Vietnam;
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Times Cited By KSCI : 4  (Citation Analysis)
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