Foreign direct investment attraction policies in transitional economies: Lessons from Vietnam?

Vien, Kim Cuong
Oehlers, Alfred
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Master of Business
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Auckland University of Technology

Foreign Direct Investment (FDI) has empirically become an important contributor to the economic development of the transitional economy of Vietnam. Attracting FDI is therefore recognized as a vital task for the Vietnamese government, and much concerted effort of the government has been made on FDI attraction. However, the task has not been satisfactorily performed with little progress since 1998, one year after the Asian financial crisis. Considering this problem, a key question to be addressed is: what can be done to improve the Vietnam’s performance in attracting FDI?. The purpose of this dissertation is to answer this question. To do so, this dissertation will undertake two main tasks: (1) establishing a generic mix of FDI–attraction policies that might be appropriate for transitional economies, (2) juxtaposing that mix of policies against the current FDI-attraction policies in Vietnam so that recommendations on necessary policy adjustment may be made. Chapter One of the dissertation is an introduction. In Chapter Two, the determinants of FDI will be investigated to identify some policy implications for attracting FDI. Chapter Three will examine empirically key government policies, and their effects on FDI, in transition economies and some other developing economies. Chapter Four will combine the policy insights from Chapter Two and Three to establish a mix of policies that may be useful in attracting FDI in transition economies. In Chapter Five, the mix of FDI attraction policies will be juxtaposed against the FDI policies of Vietnam to identify some recommendations for improving the FDI policy of Vietnam. A final chapter will offer a conclusion to the dissertation.

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