The impact of foreign direct investment on structural economic in Vietnam

Abstract

This study examines the impact of FDI inflows on the sectoral economic structure of Vietnam. With data from the first quarter of 1999 to the fourth quarter of 2017 and the application of the vecto autoregression model (VAR), the econometric analysis provides second key results. First, there is a strong statistical evidence that foreign direct investment has a direct impact on Vietnam’s sectoral economic structure. Accordingly, this impact makes the proportion of agriculture and industry tends to decrease, the proportion of the service sector tends to increase. Second, industry support active FDI attraction to Vietnam. This result is an important suggestion for policy-maker in planning directions for development investment and structural transformation in Vietnam.