Institutional Determinants of FDI in Vietnam
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2017-08-29
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en
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Abstract
Using panel data for Vietnam as the host country and 28 source countries in the period 2005 – 2015, this study investigates the role of institutional quality on FDI inflows in Vietnam. It focuses on six dimensions of institution related to corruption, government effectiveness, political stability, regulatory quality, rule of law, and accountability. The result reveals that institutional quality is important and significantly matters to FDI received in Vietnam. Only two out of six institutional factors have positive effects on FDI inflows while other four institutional dimensions have negative effects. However, this does not discount the importance of a good institution. The unexpected inverse relationship between some institutional factors and FDI is probably explained by the special traits of Vietnam’s institution which is a one-party communist country with a weak legal system and high level of corruption.
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Faculteit der Managementwetenschappen