The Long Run and Short Run Impacts of Foreign Direct Investment and Export on Economic Growth of Vietnam

Abstract

The determinants of economic growth have always been an important issue in economic research. This paper aims to study the short run and long run impact of foreign direct investment (FDI) and export on economic growth of Vietnam using annual time series data for the period 1986-2015 by implementing ARDL and error correction model. The results show that in the long run FDI has a significant positive impact on Vietnam economic growth while the effect of export is negative. However, FDI and export do not have any significant impact on growth in the short run. These results offer new insights into Vietnam’s openness policy for promoting economic growth.