Những yếu tố quyết định đến tăng trưởng kinh tế của Việt Nam = Determinants of economic growth in Vietnam

Hoàng Thị Thu Tạp chí KHOA HỌC & CÔNG NGHỆ 124(10): 31 - 37

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DETERMINANTS OF ECONOMIC GROWTH IN VIETNAM

Hoang Thi Thu*

College of Economics and Business Administration - TNU

SUMMARY

This study explores factors that determine the economic growth in Vietnam by using time-series

model in 1988-2013. The study shows that there are strong and positive effects of domestic

investment and foreign direct investment on Vietnamese economic growth as a channel of

increasing the stock of capital. Exchange rate and Asian financial crises also determine the

economic growth. However, human capital and trade in Vietnam are not yet the channels that

increase Vietnam’s economic growth.

Keywords: determinant, economic growth, FDI, domestic investment, Vietnam

INTRODUCTION*

Recognized as a premier target for the

economic development, economic growth and

its determinants have attracted increasing

attention in both theoretical and applied

research. Literature on economic growth

showed that there are a several partial theories

discussing the role of various factors in

determining economic growth. In neoclassical

growth model, such as Solow’s growth

model, investment and labor are emphasized

as important determinants of economic

growth. The endogenous growth theory of

Romer (1986, 1990) and Lucas (1988) added

human capital and innovation as the new

factors for explaining economic growth.

Besides, labor, human capital, domestic

investment, openness and some non economic

factors showed both insignificant and

significant effects on economic growth in

several empirical researches.

Since the launch of market-oriented economic

reforms in 1986, Vietnam move towards trade

liberalization. Market orientation, open￾economy and competition for foreign direct

investment with other regional and global

markets were important policies to

Vietnamese government restructuring the

economy. Economic growth increased

dramatically in Vietnam over time. In 2013,

the GDP value was nearly seven times that of

* Tel: 0989 910591

1986. Nearly three decades since 1986, the

Vietnamese economy has grown at a rate of

7.5 percent annually. So what are the major

factors that determine high economic growth

in Vietnam since its economic reform in

1986? What useful policy implications can

the country apply to increase its economic

growth in the long run? This study intends to

address these specific questions.

The structure of the study is organized as

follows. Section 2 presents the model, data

and research methodology. Section 3 presents

the findings and interpresentation. The final

section deals with conclusions and policy

implications.

METHODOLOGY AND DATA

Model specification

The purpose of this research is to examine the

determinants of economic growth in Vietnam

over the 1988-2013 period. Based on the

theoretical models of the neoclassical and

endogenous growth and some empirical

analysis models such as Romer (1990) and

Markiw-Romer-Weil (1992), the research has

developed the model to identify the most

important determinants of economic growth

in Vietnam. The econometric model is

derived from a production function in which

economic growth is the dependent variable.

Foreign direct investment, domestic capital,

labor, human capital, trade, exchange rate and

some dummy variables are independent