Does World Trade Organization (WTO) Membership account for the increase in FDI Inflows to Vietnam? What about other factors?
Main Article Content
Abstract
Despite many researches about the impact of WTO membership on FDI inflow to big developing countries like China, not many considers Vietnam even the country has become a member since 2007. Applying Random-effect technique for panel data from 1995 to 2011, the paper strongly supports the positive effect of WTO accession of Vietnam. Besides, the paper does find out new stylized facts and also affirms previously mentioned ones in a deeper approach. Those stylized facts are (i) The 1997 banking crisis leads to the rise in FDI into Vietnam, (ii) BIT between Vietnam and its partner does help the country attract more FDI, (iii) Infrastructure (proxied by Telephone or Internet user ratio) of Vietnam has a significantly positive impact on FDI, (iv) Tax rate reduction brings motivation for investors and (v) Investors do care much about Vietnam institution aspects of political stability and absence of violence, regulatory quality and control of corruption and the effect of these three institution determinants capture the WTO-accession impacts on FDI.
Article Details
Keywords
World Trade Organization, Foreign Direct Investment, Vietnam
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