FDI and Growth: Evidence From Provinces and Cities in South East Region of Vietnam

The paper uses recent panel dataset of provinces and cities in South East region of Vietnam to investigate the effects of foreign direct investment (FDI), local governance quality, state investment rate, domestic private investment rate and trade openness on economic growth. Empirical results show that an increase in foreign direct investment share to GRDP and governance capacity and quality of provincial authorities in creating a favorable business environment will significantly impulse the growth of the local economy. The private investment is found to play an important role in the economic growth of South East provinces and cities, while the impact of public investment and trade openness on economic growth of the region is found to be insignificant over the period 2015 - 2019