Foreign direct investment and endogenous growth in Vietnam

2008/04/21 by Tam Bang Vu
Economics, Econometrics and Finance · #Fiscal Policy and Economic Growth #Global trade and economics #Economic Growth and Productivity

paper · doi:10.1080/00036840600749433

Abstract

Foregin Direct Investment's (FDI's) contribution to growth has been a controversial topic in economic literature and appears to be country specific. In this article, we use time-varying coefficients in an augmented production function and let FDI indirectly affect Gross domestic product growth through labour productivity. This approach creates built-in heteroskedasticity, so the feasible generalized least square estimation is employed. The results show that FDI has significant and positive effect on labour productivity and economic growth in Vietnam, but the effect is not equally distributed among economic sectors.

Citations

• A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity

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