Empirical research on the impact of foreign direct investment on growth in Vietnam's economy

By employing the difference Generalized Moment of Method (GMM) and the Pooled Mean Group (PMG) methods, the paper analyzes the role of foreign direct investment (FDI) and other factors in economic growth in Vietnam in the period 2000-2015. Besides, the paper clarifies the spillover effects of FDI to other variables in the model through Granger causality test. The research collects the most balance updated data from 43 provinces or cities to run regressions. For the first time, the recurrent expenditure variable is put into the model. The fact of encoding geography control variable instead of dummy one as previous studies is another novelty of the paper. The results indicate that FDI has a positive and significant impact on Vietnamese economic growth in the long-term. Moreover, it also affirms the two-way causal relationship between FDI and other independent variables as private investment, labor force, tax revenues, infrastructure, trade openness and technology gap. This will serve as a basis for mapping out policies over FDI to boost economic growth in the coming time