Economic Growth and Foreign Direct Investment Attraction - A Study in Vietnam

In many countries in the world, Foreign Direct Investment (FDI) is considered as an important factor in accelerating economic growth. However, the real impact of FDI is still a controversial issue in both theoretical and practical aspects. This research summarizes the situation of Vietnam's FDI over the last 25 years and evaluates the relationship between FDI and GDP in Viet Nam by means of Granger causality tests and the Vector Autoregressive model (VAR) combined with Impulse Response Function and Variance Decomposition Analyses. Annual data on Gross Domestic Product – GDP and implemented FDI of Viet Nam from 1990 to 2015 do not provide evidence on the contribution of FDI implemented in GDP. However, the research has found out the inverse relationship: the capability to attract FDI depends on economic growth in the previous year