- Log In/Sign Up
- P-ISSN1738-3110
- E-ISSN2093-7717
- SCOPUS, ESCI
ISSN : 1738-3110
Impact of International Trade Cooperation and Distribution on Foreign Direct Investment: Evidence from Vietnam
Abstract
Purpose: This study aims to find the impact of international trade cooperation and distribution on foreign direct investment (FDI). The study also tests the impact of lag variables of trade cooperation and distribution on FDI in the future. Research design, data, and methodology: Autoregressive Distributed Lag model is applied to analyze the impact of chosen variables such as total trade (TRADE), trade openness (OPEN), the exchange rate (EXR), inflation (INF), and gross domestic growth (GDP) on FDI. Quarterly data is collected from Vietnam General Statistic Office, Vietnam General Department of Customs, International Monetary Fund, and The World Bank from 2006 to 2020. Stata 14 software is used to analyze the regression and test variables. Results: The findings indicate that TRADE, OPEN, INF, GDP, and their lags affect both positively and negatively on FDI in different periods. While OPEN still expresses an unclear impact on FDI. Moreover, this study proves that the FDI of a nation is influenced by international cooperation. Conclusions: This study indicates the importance of international trade cooperation and distribution in not only attracting foreign investment sources but also developing the economy. Findings are necessary bases for governments or authorities in signing international trade agreements in the future.
- keywords
- Distribution, Foreign Direct Investment, International Trade Cooperation, Vietnam
Reference
Ang, J. B. (2008). Determinants of foreign direct investment in Malaysia. Journal of Policy Modeling, 30(1), 185-189. https://doi.org/10.1016/j.jpolmod.2007.06.014.
Bannaga, A., Gangi, Y., Abdrazak, R., & Al-Fakhry, B. (2013). The effects of good governance on foreign direct investment inflows in Arab countries. Applied Financial Economics, 23(15), 1239-1247. https://doi.org/10.1080/09603107.2013.802088.
Barker, T. (1977). International trade and economic growth: An alternative to the neoclassical approach. Cambridge Journal of Economics, 1(2), 153-177. https://doi.org/10.1093/oxfordjournals.cje.a035356.
Barro, R.J., & Sala, M. X. (2004). Economic Growth. MIT, Cambridge.
Belloumi, M. (2014). The relationship between trade, FDI and economic growth in Tunisia: An application of autoregressive distributed lag model. Economic Systems, 38(2), 1-22. https://doi.org/10.1016/j.ecosys.2013.09.002.
Dang, V.C., & Nguyen, Q. K. (2021). Determinants of FDI attractiveness: Evidence from ASEAN-7 countries. Cogent Social Sciences, 7(1), 2004676. https://doi.org/10.1080/23311886.2021.2004676.
Dritsaki, M., & Dritsaki, C. (2020). Trade Openness and Economic Growth: A Panel Data Analysis of Baltic Countries. Asian Economic and Financial Review, 10(3), 313–324. https://doi.org/10.18488/journal.aefr.2020.103.313.324.
Farhad, N., Alberto, P., & Ali, Y. (2001). Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence. World Development, 29(9), 1593-1610. https://doi.org/10.1016/S0305-750X(01)00054-7.
Hicks, J. R. (1937). Mr. Keynes and the “Classics”: A Suggested Interpretation. Econometrica, 5(2), 147-159. https://doi.org/10.2307/1907242.
Imansyah & Nasrudin. (2016). The Impact of Economic Integration and Macroeconomic on Indonesia Foreign Direct Investment (FDI): A Panel Gravity Model. Journal of Distribution Science, 14(4), 33-38. https://doi.org/10.15722/JDS.14.4.201604.33.
Ismail, N. W., Smith, P., & Kugler, M. (2009). The Effect of ASEAN Economic Integration on Foreign Direct Investment. Journal of Economic Integration, 24(3), 385–407. https://doi.org/10.11130/jei.2009.24.3.385.
Jayachandran, G., & Seilan, A. (2010). A causal relationship between trade, foreign direct investment, and economic growth for India. International research journal of finance and economics, 42, 74-88.
Jenkins, R. (2004). Vietnam in the global economy: trade employment and poverty. https://doi.org/10.1002/jid.1060. Journal of international development, 16(1), 13-28.
Jin, H. K. (2016). The Investment Aspects from the FTA between Korea and China. Journal of Distribution Science, 14(8), 87–92. https://doi.org/10.15722/JDS.14.8.201608.87.
Joseph, D.A., Wang, P.M., & Park, D.H. (2010). The Impact of Exchange Rate on FDI and the Interdependence of FDI over Time. The Singapore Economic Review, 55(4), 733–747. https://doi.org/10.1142/S0217590810004024.
Majidi, A. F. (2017). Globalization and Economic Growth: The Case Study of Developing Countries. Asian Economic and Financial Review, 7(6), 589–599. https://doi.org/10.18488/journal.aefr.2017.76.589.599.
Malik, Z. (2019). Impact of Exchange rate on Foreign Direct Investment in Pakistan. Scientific Journal of Agricultural and Social Studies, 1(1), 42-59.
Masron, T.A., & Kamaruddin, R. (2009). Macroeconomic synchronization and foreign direct investment inflow into ASEAN: Evidence from Malaysia’s experiences. International Business Research, 2(3): 36-46. https://doi.org/10.5539/ibr.v2n3p36.
Nakagane, K. (2002). Japanese Direct Investment in China: Its Effects on China’s Economic Development. Palgrave Macmillan, London. https://doi.org/10.1057/9781403907394_4.
Nguyen, C. D. T., Luong, B. T., & Hoang, H. L. T. (2021). The Impact of Logistics and Infrastructure on Economic Growth: Empirical Evidence from Vietnam. The Journal of Asian Finance, Economics and Business, 8(6), 21-28. https://doi.org/10.13106/jafeb.2021.vol8.no6.0021.
Omer, A. I., & Hisham, M. H. (2013). Determinants of foreign direct investment in Sudan: an econometric perspective. The Journal of North African Studies, 18(1), 1-15. https://doi.org/10.1080/13629387.2012.702013.
Pesaran, M. H. (1997). The Role of Economic Theory in Modelling The Long Run. The Economic Journal, 107(440), 178–191. https://doi.org/10.1111/1468-0297.00151.
Pokou, K. (2020). FDI Inflows and Financial Development in Ecowas: Causality Analysis in the Frequency Domain. Asian Economic and Financial Review, 10(8), 946–955. https://doi.org/10.18488/journal.aefr.2020.108.946.955.
Sahu, P. K. (2014). The influence of Malaysian FTAs on trade and investment, with special reference to Malaysia-India FTA. The IUP Journal of applied economics, 13(2), 48-70.
Sauvant, K.P. (2021). Improving the distribution of FDI benefits: The need for policy-oriented research, advice, and advocacy. Journal of International Business Policy 4, 244-261. https://doi.org/10.1057/s42214-021-00109-6.
Shrestha, M. B., & Bhatta, G. R. (2018). Selecting appropriate methodological framework for time series data analysis. The Journal of Finance and Data Science, 4(2), 71-89. https://doi.org/10.1016/j.jfds.2017.11.001.
Tembe, P. E., & Xu, K. (2012). Attracting Foreign Direct Investment in Developing countries: Determinants and Policies - A comparative Study between Mozambique and China. International Journal of Financial Research, 3(4), 69-82. https://doi.org/10.5430/ijfr.v3n4p69.
Tobin, J. (1969). A General Equilibrium Approach to Monetary Theory. Journal of Money. Credit & Banking, 1, 15-29. https://doi.org/10.2307/1991374.
Wang, C., Hong, J., Kafouros, M., & Wright, M. (2012). Exploring the role of government involvement in outward FDI from emerging economies. Journal of International Business Studies, 43(7), 655-676. https://doi.org/10.1057/jibs.2012.18.
Yong, J.J. (2013). The Impact of Free Trade Agreements on Foreign Direct Investment: The Case of Korea. Journal of East Asian Economic Integration, 17(4), 417-445. http://dx.doi.org/10.11644/KIEP.JEAI.2013.17.4.272.
Yugang, H. (2018). A Study on the Determinants of Free Trade Agreement in South Korea: Evidence from Asian Countries. Journal of Distribution Science, 16(11), 37-45. https://doi.org/10.15722/JDS.16.11.201811.37.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations