An Empirical Analysis On Investment Dynamic Effect Of CAFTA In Vietnam

The China- ASEAN Free Trade Area (China ASEAN Free Trade Area (CAFTA) was established in 2010, it is more than that of tariff cuts and trade barriers eliminated, and is to carry out more extensive cooperation, the cooperation including traditional industry field, the field of finance, tourism, investment, information, human resources development of modern service industry and such as environmental protection, traffic infrastructure construction, energy and agriculture etc. Since the start of the CAFTA in 2005, Vietnam has increased trade flows with other countries in the region, and has also received significant foreign direct investment. The dynamic effect of FDI on the foreign direct investment in CAFTA is the main content of this paper.At first, this paper summarizes the theory of regional economic integration in the practice of CAFTA’s research results, according to the related theory and research point of view put forward for Vietnam to join the dynamic effect of the CAFTA investment there are three:the effect of economic growth, trade scale expand technical effect and diffusion effect. For three dynamic effect research, this paper first from the theoretical level, using literature data and macroscopic statistical data directly on the ins and outs of three kinds of effects and manifestations in Vietnam, again from the empirical level using econometrics methods of empirical studies, three kinds of effects of the existence of confirmation. This paper argues that the economic growth effect and technology diffusion effect of FDI from the CAFTA region in the OFDI region exist, while the trade scale expansion effect of the. Finally, based on the theoretical analysis and empirical results, this paper puts forward the corresponding policy recommendations.