The Impact of International Capital Flows on Economic Growth: The Case of Vietnam

The Impact of International Capital Flows on Economic Growth: The Case of Vietnam

International Review of Business Research Papers

Vol. 12. No. 1. , March 2016, Pages: 159 – 170

The Impact of International Capital Flows on Economic Growth: The Case of Vietnam

Tram Hoang Thuy Bich Nguyen

External capital flows enable developing countries to strengthen investment activities, increase economic growth and reduce poverty. Therefore, this research is conducted primarily to investigate the impact of the long-term and short-term capital flows on Vietnamese real GDP growth. The autoregressive distributed lag (ARDL) bound testing method is applied to examine the empirical relationship. The regression results show that there is a long-run relationship between foreign capital flows and economic efficiency. ODA is found to have a stronger impact on the economy than FDI and short-term capital flows.

JEL Codes: F21, F32, F35 and F63

DOI : http://dx.doi.org/10.21102/irbrp.2016.03.121.11