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Researching the determinants of the attraction of FDI flows into Vietnam

The main objective of the thesis is to identify the determinants of FDI flows and regional distribution in Vietnam. The thesis focuses primarily on answering the two questions: What determines the attraction of FDI into Vietnam? What are the factors that influences FDI distribution across Vietnam’s regions? | --1-- INTRODUCTION 1. Research proposal The flow of foreign direct investment FDI into Vietnam begun in 1988. This turning-point was considered an achievement of the economic transformation from central planning to socialism market-based Kokko et al. 2003 . After economic reform was implemented Vietnam s annual FDI increased dramatically reaching 22.352 2 mil with annual growth rate higher than 30 General statistics directorate 2014 . The height of this flow was in 2008 with a total of 71.000 mil but there was a steep decline from 2009 to the present from registered 23.107 3 mil in 2009 to 16.348 mil in 2012 equivalent of 29.3 . Though the decrease was not against the global trend under the impact of economic crisis when compared with ASEAN and China the flow showed an increment during the past four years. This begs for questions What determines the attraction of Vietnam s FDI What are the factors effecting the FDI distribution across Vietnam s regions Given the importance of FDI to economic growth the answers for these are necessary for bringing in appropriate suggestions to further improve the encouragement of upcoming FDI into Vietnam in general and into the regions in specific. The reasons stated above urge this author to carry out a thesis for PhD qualification with the topic Researching the determinants of the attraction of FDI flows into Vietnam . 2. Research related literature The author s summarized survey indicates there exists a range of both theoretical and empirical researches done on the proposed topic or similar worldwide. However the number of empirical works on the determinants of attraction and distribution of Vietnam s FDI remains low. As far as these determinants are concern the majority of surveyed authors utilize different variables and methods in accordance with their statistical database. Consequently the overall results were divided into two groups based on primary and secondary data. Representing the first are Hafiz and Giroud --2-- 2004 .