Since the initiation of economic reforms in the mid-1980s,Viet Nam has made a rapid transition from a planned to an increasingly market-driven economy. Foreign direct investment (FDI) has played an important part in this process from early on. In fact, one of the first concrete steps towards renovation
was to promulgate a law on foreign investment in 1987.1(The first Law of Foreign Investment in Viet Nam was dated 29 December 1987. Several amendments have been made since then. The current
law is dated 12 November 1996 (Viet Nam, National Assembly, 1996).)
This resulted in the emergence of FDI as an important element of Vietnamese economic development. FDI commitments increased rapidly, albeit from a low level, both in terms of the number of projects and the amount of funds. Whether FDI is an important determinant of economic growth, in fact the role of FDI has been critizied into two different theories :
The neoclassical theory of economic growth has sought to provide an explanation of the consequences as well as the causes of the presence of FDI in developing countries. In the neoclassical theories, FDI inflows are financial tool to fill the saving-investment gap, the foreign exchange gap, and the fiscal gap in host developing countries. FDI inflows does not impact the long-run growth rate, but the income (Economic Survey of Europe, 2001 No. 1)
In the endogenous growth theories, FDI influent rise in variable way as R&D, and human capital (R. Lucas Jr., "On the
mechanics of economic development", Journal of Monetary Economics,
Vol. 22, No. 3, 1988, pp. 3-42.)
From the mid-1980s to the present, FDI is considered to be an important capital source to helper structuring and increase the competitiveness of the economy. FDI has become a indispensable factor of the Vietnamese economy in the scene of deeply integration to the world.
The early years of the 25 year journey to attract foreign investment we had achieved remarkable success. In this context, Vietnam has launched several measures toopen fiscal polic , rapidly improving environment to attract foreign investment in order to deal with the decline of foreign direct investment flows and the changes in new process of globalization. The fiscal policy changes, especially tax policies in the term of increasing investors's interest by the Government of Vietnam evaluated as an urgent change to increase the attractiveness of the investment environment.
Annual FDI inflows into Vietnam have increased dramatically from USD 0.32 billion in 1988 to nearly USD 4.0 billion in 2005, with an annual growth rate of 28 percent (GSO 2006). During this period, FDI inflows have played a very important role, not only in providing investment capital but also in stimulating export activities, as well as introducing new labour and management skills, transferring technologies and generating job opportunities.
However theoretically as well as practically, there are still inconclusive arguments for and against the role of FDI inflows in enhancing economic growth in a country.
Whether FDI inflows are beneficial or not to economic growth, and what governments should do to attract and use FDI inflows effectively, are still a matter of considerable debate (Longani & Razin 2001; Masina 2002; Kokko et. al. 2003).
Furthermore,FDI inflows not only into Vietnam but also into many other developing countries take advantage of the comparative advantage of these countries with respect to cheap labour and natural resources. As a result of FDI inflows, many developing countries, especially Asian newly industrializing countries(NICs), have experienced great advances in their economic development.
According to JETRO (2011), the cumulative Japanese FDI capital
into the country from 1996 to September 2010 took only 21% of the Japanese FDI in Thailand, 8% of those in China (Figure 2) and only 2.6% of the total Japanese FDI in Asia.
As for investment prospect, Vietnam ranked 11th in the 15 most attractive
economies for the location of FDI 2009-2011 behind China, United States, India, Brazil, Russian Federation, United Kingdom, Germany, Australia, Indonesia and Canada for her market growth, access to regional market, cheap labor and investment incentives (UNCTAD, 2009, pp.54-56). Most flow of FDI come to Vietnam from the European Union and Japan (Salvatore,2011).However, Vietnam was still far behind neighboring countries in attracting Japanese FDI.
Aims and Objectives
The aim of this research are investigate the relationship between FDI and economic growth in Vietnam. Two supporting aims are classify the finance policies impact to FDI and construct the comparative study between FDI inflows in Vietnam and other comparative country.
The specified objectives of this research are:
To identify how FDI impact on economic growth in VietNam after DoiMoi.
To investigate the finance policies in actracting Fdi in Vietnam significantly after Asia finance crisis 1997
To determine a comparative study between FDI in Vietnam and other country
Primary purpose of the study is to investigate and synthesize data and information to clarify the situation and problems encountered in FDI in Vietnam.the research is also go deep into the field of fiscal policies that has no previous detailed research.set this objective into consideration, this study is exploratory study.
Methodology
Comparative, analytical and synthetic methods are utilized in the research.
There resources are also used in the thesis:
+ The information and data are collected from official sources like Investment and Planning Ministry, Vietnam's Statistic Bureau, World Bank, International Monetary Fund and International Energy Association.
+ The Primary data is also collected from survey research in industrial parks carried out by Hanoi, Environment and Natural Resources Ministry, Investment and Planning Ministry and Hanoi Investment and Planning Department.
+Literature review
Secondary data will be reviewed initial through the university library using a range of information sources such as the OPAC system, Dspace system of Ho Chi Minh University of Economic and Finance, RePEc of the Munich University Library in Germany, academic and commercial abstracts, bibliographic databases, and Internet search engines.
To aid the search, a table of key terms will be constructed and the sources located will be correlated with this. A secondary cross-reference table will be developed so that data can be viewed from different perspectives.
Scope and constrant
6. The thesis's contribution:
The basic
Ethical issues
The research is purely based on literature review and questionnaire, where the confidentiality is kept at high importance. The sample questionnaire will not include any personal information like name, telephone or address. It will hold little demographic information and most particularly of their buying habit. The data collected will be stored in a safe place till the end of the analysis and will be destroyed after the evaluation and final assessment.
It requires no ethical clearance from any external body.
The permission has been taken from the organisations to interview their customers.
Timetable of main stages of the study
No.
Activity
Time frame (2012 - 2013)
March
April
May
June
Jul
Aug
Sep
1
Literature review
2
Primary research
3
Secondary research (questionnaire & interview)
4
Data collection & analysis
5
Recommendation
6
Finalizing & complete the writing
7
Review
