Revisiting Exports and Foreign Direct Investment in Vietnam
20 Pages Posted: 12 Jun 2011
Date Written: June 2011
Since 1986, Vietnam has undertaken various reform measures in the trade and foreign investment area. This paper finds significant contributions of world trade, and competitiveness and liberalization effects to Vietnam's export growth over the period 1997–2008. Vietnam's exports became more competitive and better complemented the import demand of Vietnam's trade partners. In addition, dynamic comparative advantage became evident in many products, but significant room remains for improving export competitiveness. Foreign direct investment (FDI) inflows also increased and helped stimulate Vietnam's exports. FDI inflows have increased in both the short‐ and long‐term, yet are only of a limited magnitude. This necessitates more effective measures to enhance the linkages between FDI and domestic enterprises.
Keywords: CMS decomposition, export competitiveness, FDI policy reform, spillover impact, trade liberalization
JEL Classification: F14, F15, F21
Suggested Citation: Suggested Citation