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Foreign direct investment in industrial transition: the experience of Vietnam

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  • Prema-chandra Athukorala
  • Tran Tien

Abstract

This paper examines the role of foreign direct investment (FDI) in the process of industrial transition in Vietnam under market-oriented reforms. The findings are consistent with the conventional wisdom that concomitant liberalisation of trade and investment regimes, accompanied by creating a congenial environment for market-based decision making by the private agents, is vital for reaping developmental gains from FDI. During the 1990s growth of employment in firms with foreign capital participation lagged behind output growth, reflecting the capital-intensity bias in domestic-market-oriented production in a partially liberalised economy. This pattern has changed notably in recent years as the product mix gradually became export oriented in response to further liberalisation of trade and investment policy regimes.

Suggested Citation

  • Prema-chandra Athukorala & Tran Tien, 2012. "Foreign direct investment in industrial transition: the experience of Vietnam," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 17(3), pages 446-463.
    • Handle: RePEc:taf:rjapxx:v:17:y:2012:i:3:p:446-463
    DOI: 10.1080/13547860.2012.694699
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    1. World Bank, 2005. "Vietnam Business : Vietnam Development Report 2006," World Bank Publications - Reports 8314, The World Bank Group.
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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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