Su Dinh Thanh

School of Public Finance, University of Economics Ho Chi Minh City

Vietnam

Dinhthanh@ueh.edu.vn

Impact of foreign direct investment, trade openness and economic institutions on growth in emerging countries: The case of Vietnam

Nguyen Phuc Canh

School of Banking, University of Economics Ho Chi Minh City

Vietnam

Canhnguyen@ueh.edu.vn

Christophe Schinckus

Taylor’s Business School, Taylor’s University

Malaysia

Christophe.Schinckus@taylors.edu.my

Abstract. This article investigates the role of economic institutions and economic openness in the growth of a specific emerging economy – Vietnam. The data from Vietnamese 63 provinces in the period of 2005-2015 have been collected to examine the influences of institutional quality on the inward FDI, trade and growth. By employing the system GMM estimators, our main findings show that, first, the combined effect of inward FDI with trade openness has a substitute effect on the economic growth while they have a positive impact taken separately. This article discusses this interesting aspect. Second, economic institutions significantly influence the combined effects of foreign direct investment with trade openness in improving economic growth.

Received: December, 2018

1st Revision: May, 2019

Accepted: September, 2019

DOI: 10.14254/2071-8330.2019/12-3/20

JEL Classification: F21, F18, E23, F43

Keywords: economic institutions, foreign direct investment, growth, trade openness