Foreign direct investment in Vietnam: a catalyst for labour productivity and structural change?
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PhD Seminar (Econ)
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This study examines the relationship between foreign direction investment (FDI) and the two key pillars of economic growth: labour productivity and structural change, based on panel data for 63 provinces in Vietnam spanning from 2010 to 2019. The results indicate that FDI, particularly in the industrial sector, correlates positively with labour productivity and structural change. However, while FDI significantly corresponds with structural change, its relationship with labour productivity is relatively modest. The results also reveal that the benefits of FDI are not monolithic and are contingent on other factors such as the initial structural gap, level of economic development, and institutional quality. These findings emphasise the importance of ongoing efforts to attract high-quality FDI while concurrently improving the quality of the enabling environment to maximise the benefits of this external source of investment.
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