The Impact Of FDI On Vietnam's Regional Economy

Foreign direct investment(FDI)is one of important economic activities.FDI is not only key point to research international economy,regional economy,political economy,economic geography.Many scholars believed that FDI attraction plays an important part in the country economic development,especially in the development country.FDI plays a very important role in the economy of developing countries,including Vietnam.At the moment of global economic integration,foreign direct investment(FDI)capital plays an important role in economic development.Since Vietnam reformed in 1986,and FDI inflows into Vietnam have increased steadily,especially after Vietnam joined the World Trade Organization(WTO)in 2007.It is one of the most attractive countries in Southeast Asia.On the way of integrating into worldwide economy,Vietnam economy faced many problems so that researching regional economic growth impacted by FDI is very important meaningful in practice.Since the 1990s,economists studied the effects of FDI on Vietnam's economic development.Although there is some inconsistent views,the majority of the study's findings suggest that FDI has a positive impact on economic growth,FDI drives economic growth,FDI is An important motive for economic development.This thesis studies the impact of FDI on economic development in Vietnam,studies the impact of FDI on:GDP growth;employment;import-export turnover;total industrial production value.This solves and answers a series of questions such as:how FDI affects the development of the Vietnamese economy,how the level of influence varies across the regions,that FDI disparity is unequal and economic development is unequal among related areas,and which mechanisms FDI affects the uneven development between the regions in Vietnam through.The thesis studys the following key issues:(1)Foreword mainly introduces research context,research meaningand synthesizes research works at home and abroad,research route,research method,innovation and build a research framework of this study.(2)Basic concepts and theories involved,first analyze clearly the basic concepts involved,then introduce and analyze the relevant theories.For instance:The Theory of Investment and Trade Substitution,Theory of Comparative Advantage,the Eclectic Theory of International Production,Location theory,"Two-gap" Theory,Neoclassical growth theory and the Theory of Endogenous Growth,the theory of Economic Radiation.(3)Analyze the characteristics and evolution of FDI attraction in Vietnam,analyze the key features and issues in attracting FDI in three major areas in Vietnam;Analyze the characteristics of FDI distribution and economic development in three large and six small regions;Analyze the uneven FDI attraction and economic development in areas based on the Theil index,analyzes the factors influencing FDI attraction in Vietnam.(4)Analyze the FDI affecting the GDP of the regions,in turn conduct the analysis in 3 large areas and 6 small areas;Analyze the FDI's effect on the total industrial output of the regions.First,analyze the share of total industrial output in each region over the total industrial output nationwide.Then,analyze the share of total industrial output of FDI enterprises in each region over the total industrial output of FDI enterprises in the whole country.Next,analyze the share of total industrial output of FDI enterprises in each region over the total industrial output of such region.Finally,summarize the findings and draw the conclusions.(5)First,conduct the overall analysis of FDI's effect on employment,namely analyzing FDI's effects on employment in terms of quantity,quality,location.Then,apply the regression analysis method to analyze FDI's effect on employment in each region.Finally,summarize results and draw conclusions.(6)First,analyze the relationship between FDI and export-import trade,respectively,analyze the degree of dependence of exports and imports on FDI in each region.Next,analyze the situation of export and import distribution in each region,the ratio of export and import of each region over total exports and imports nationwide,the ratio between export and import of each FDI enterprise in each region over the export and import of each area.Then,use the regression analysis to analyze FDI's effects on the import and export of each region.Finally,summarize the findings and draw the conclusions.(7)Experience in attracting FDI from China,a comparison of Vietnam and China's attraction of FDI policies.First,analyze some similarities between Vietnam and China;Second,analyze the mechanism of attracting FDI into Vietnam,namely:Conditions for attracting FDI,Sectors attracting FDI,and FDI evaluation policy;Third,preferential treatment policies for FDI enterprises,including tax treatment and other treatment regimes;Fourth,policies to attract FDI by region;Fifth,analyze conditions for the establishment of FDI enterprises;Finally,based on the analysis results in the previous sections,draw policy hints for attracting FDI in Vietnam.(8)Solutions to attract FDI in each region in Vietnam,based on the research results drawn in the above sections,respectively analyze solutions to attract FDI for each region in Vietnam.The new main points of this thesis:(1)This is the first time 3 major areas and 6 small areas in Vietnam are considered as study scopes in the thesis;This is the first time the thesis applies the basic theories of FDI and economic growth,related data and quantitative research tools to study FDI's effect on the economic growth of the regions in Vietnam,find out the main causes for uneven FDI and economic growth in areas,thus draws recommendations on policy solutions.(2)Apply RCA(Revealed Comparative Advantage)Index and regression analysis method to analyze the FDI's influence mechanism on the exports and imports of 3 areas in Vietnam.Firstly,use RCA index to analyze the FDI's influence mechanism on the exports and imports of 3 areas in Vietnam;Next,apply regression analysis to analyze the FDI's influence on the exports and imports in three regions;Finally,synthesize the research results to draw relevant conclusions and provide appropriate policy solutions.(3)This is the first time Theil Index is used to analyze why FDI distribution is uneven across the regions and the thesis utilizes six small factors(i.e.:North East,North West,Red River Delta,Central Highlands,North Central and South Central Coast,Mekong River Delta,South East,)and three big factors(ie:the North,the Central and the South)to analyze why the FDI distribution is uneven,thus drawing the conclusions:The disparity in FDI attraction in six small regions has led to the difference in FDI attraction in three major regions,in other words:One of the main reasons for the uneven FDI attraction in the three large areas is that three small areas have low FDI attraction rates(i.e.:North East and North West,Central Highlands,Mekong Delta).(4)This is the first radiation theory in economic development is used to explain the uneven FDI distribution in Vietnam.In the previous studies on the FDI's effect on regional economic growth,scholars did not use the theory of radiation in economic development to explain the uneven FDI distribution in Vietnam.The thesis uses the theory of radiation in economic development to explain the trend of "North increases and South decreases" of the FDI proportion,then apply the theory of radiation in economic development into the regional economic development realities in Vietnam,thereby increasing awareness of the importance of economic development cooperation between regions.