Impact of Foreign Direct Investment on Economic Growth in the North Provinces of Vietnam in the Quality of Institutions Government

Abstract

The impact of foreign direct investment (FDI) on economic growth has long been of interest to researchers and policy makers. However, the results of this effect are still controversial; some studies suggest that FDI has the ability to promote economic growth. Some other studies suggest that FDI has a negative effect on economic growth. In this study, the authors examine the impact of FDI on economic growth in the Northern provinces of Vietnam in terms of the quality of institutional governance in these provinces in the period 2011-2020. By the two-step SGMM estimation method, the research results show that FDI has a positive impact on economic growth. At the same time, institutional quality is one of the causes affecting the relationship between FDI and economic growth. On the basis of research results, the author provides policy implications for the Northern provinces of Vietnam.