Assessment of the Effect of FDI on Employment in the Enterprise Sector in Vietnam
Main Article Content
Abstract
Since the Foreign Investment Law was first promulgated in Vietnam in 1987, the inflows of FDI to the country have increased significantly over the years. Among the contributions of FDI to the socio-economic development of the country, interest is placed on employment creation. The purpose of this study is to assess the effect of FDI on employment in the enterprise sector in Vietnam. The empirical study is conducted at the local level with all 63 provinces nationwide in the period from 2006 to 2014. The results reveal that FDI enterprises have a higher effect on employment creation than domestic enterprises. Beside, a positive relation between the share of FDI enterprises (in terms of the size of FDI in relative to the total capital resource) and the growth of employment in the enterprise sector is found which implies that the relatively larger presence of FDI enterprises can have positive spillover effects on employment growth. However, the spillover effects of FDI are considered limited.
Keywords:
FDI, employment, enterprise sector
References
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[10] J. Abor, S. Harvey, “Foreign direct investment and employment: host country experience”, Macroeconomics and Finance in Emerging Market Economies 1(2) (2008) 213-225.
[11] S. Pinn, K. Ching, M. Kogid, D. Mulok,
K. Mansur, N. Loganathan, “Empirical analysis of employment and foreign direct investment in Malaysia: an ARDL bounds testing approach to cointegration”, Advances in Management and Applied Economics 1(3) (2011) 77-91.
[12] A.K. Mpanju, “The impact of foreign direct investment on employment creation in Tanzania”. ENITH International Journal of Business Economics and Management Research 2(1) (2012) 126-139.
[13] M. Tshepo, “The impact of foreign direct investment on economic growth and employment in South Africa: a time series analysis”. Mediterranean Journal of Social Sciences 5(25) (2014) 18.
[14] S. Rizvi, M. Nishat, “The impact of foreign direct investment on employment opportunities: panel data analysis: empirical evidence from Pakistan, India and China”, The Pakistan Development Review 48(4) (2009) 841-851.
[15] A.T. Onimisi, “Foreign direct investments and employment generation nexus in Nigeria”, Journal of Educational and Social Research 4(5) (2014) 119.
[16] S. Malik, “Employment effect of foreign direct investment in Indian manufacturing industries”, The Indian Journal of Labor Economics 62(4) (2019) 621-637.
[17] A. Waldkirch, P. Nunnenkamp, A. Bremont, “Employment effects of FDI in Mexico's non-maquiladora manufacturing”, The Journal of Development Studies 45(7) (2009) 1165-1183.
[18] S. Karlsson, N. Lundin, F. Sjöholm, P. He, “Foreign firms and Chinese employment”, The World Economy 32(1) (2009) 178-201.
[19] R. Lipsey, F. Sjöholm, J. Sun, “Foreign ownership and employment growth in Indonesian manufacturing”, National Bureau of Economic Research, No.15936, 2010.
[20] J. Inekwe, “FDI, employment and economic growth in Nigeria”, African Development Review 25(4) (2013) 421-433.
[21] Narender, R. Dhankar, “Foreign capital inflows and growth of employment in India: an empirical evidence from public and private sector”, International Journal of Economics and Finance 8(2) (2016) 189-196.
[22] General Statistic Office of Vietnam: Foreign direct investment enterprises in the period of 2006-2011, Results of foreign invested enterprises in the period 2011-2016, Development of Vietnam enterprises in the period of 2006-2011 and Business results of Vietnamese enterprises in the period 2000-2014.
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https://www.princeton.edu/~otorres/Panel101.pdf, 2007 (accessed March/2016).
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https://www.nhandan.com.vn/nation_news/item/36454402 (accessed June/2020).
[25] “Connecting FDI and domestic businesses”, at: http://tapchitaichinh.vn/nghien-cuu-trao-doi/ket-noi-fdi-va-doanh-nghiep-trong-nuoc-142166.html (accessed June/2020).