The Impact of the Crisis on Investment Behaviour in Foreign Direct Investment Enterprises in Vietnam

Abstract

During the COVID-19 pandemic, companies were directly impacted by this global crisis, and Foreign Direct Investment (FDI) enterprises, with their unique investment cash flow, were no exception. This study aims to examine how the COVID-19 crisis impacted the investment cash flow of FDI enterprises. During the COVID-19 pandemic, Foreign Direct Investment (FDI) enterprises not only faced challenges in production and operations but also grappled with issues related to cross-border travel. Research based on the theory of investment relationship and crisis has been proposed by many researchers. The research was conducted on 45 FDI enterprises that have invested in Vietnam from 2013 to 2022. The study employs the Difference-in-Generalized Method of Moments (DGMM) to address endogeneity. The results indicate that COVID-19 has reduced the investment cash flow of FDI enterprises. Based on these research findings, the authors also propose several policy measures to assist stakeholders in making appropriate decisions during similar crises such as COVID-19. The study contributes to the forecasting of investment cash flows for FDI enterprises during similar crises such as COVID-19.