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http://dx.doi.org/10.13106/jafeb.2021.vol8.no11.0325

The Relationship between Foreign Capital Inflows and Economic Growth: Empirical Evidence from Vietnam  

NGUYEN, Cung Huu (Faculty of Business Administration, Vietnam Aviation Academy)
PHAM, Thi Truc Quynh (Faculty of Business Management, Hanoi University of Industry)
TRAN, Thi Hoa (Faculty of Business Management, Hanoi University of Industry)
NGUYEN, Thi Hoa (Faculty of Business Management, Hanoi University of Industry)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.11, 2021 , pp. 325-332 More about this Journal
Abstract
Foreign capital inflows play an essential role in each country's socio-economic growth, particularly for undeveloped and developing countries where capital accumulation is limited in the early stages of development, and Vietnam is no exception. The purpose of this article is to examine the impact of foreign capital inflows on economic growth in Vietnam. The empirical method employed secondary time-series data set during the period 1995-2018 to determine the impact of FDI, foreign aid, foreign loans, and exports on economic growth in Vietnam by using a linear approach. For this study, data was collected from the World Bank and relevant agencies in Vietnam. The results show that FDI (net inflows), foreign aid, foreign loans, exports, and GDP (current), have a positive effect at a 1% significance level on economic growth. Rather, an increase in FDI (net inflows), foreign aid, foreign loans, exports has beneficial effects on the Vietnamese economy in the study period. Based on the findings of this study, the article proposes several important policy implications for Vietnam in maintaining a high rate of economic growth via the contribution of FDI inflows, foreign aid, foreign loans, and exports.
Keywords
GDP; FDI; Foreign Aid; Foreign Loans; Exports;
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