The Relationship Between Foreign Direct Investment, Human Development, and Economic Growth in Vietnam: A Quantile-on-Quantile Regression Approach
Year: 2025
Type: article
Abstract: This study examines the dynamic interactions between Foreign Direct Investment (FDI), human development, and economic growth in Vietnam from 1990 to 2022.Employing Quantile-on-Quantile Regression (QQR) and Granger causality analysis in quantiles, the research explores the reciprocal links among FDI, the Human Development Index (HDI), and GDP, aiming to understand their interdependent effects across different economic contexts.The results reveal that FDI has a significantly positive impact on GDP growth across the 0.55-0.7 quantiles and enhances HDI within the low to middle range (0.05-0.5), underscoring the role of foreign investment in promoting economic and social development in Vietnam.In turn, HDI positively influences both FDI and GDP, particularly within the 0.05-0.7 interval, highlighting the importance of human capital in attracting investment and sustaining growth.Moreover, GDP growth positively affects FDI and HDI at early to intermediate distribution levels (0.3-0.6 and 0.05-0.65,respectively), but the effect turns negative at higher quantiles, indicating diminishing developmental returns in Vietnam's later stages of economic transition.These findings suggest that policymakers should adopt targeted strategies to strengthen human capital, attract high-quality FDI aligned with development goals, and ensure that economic growth leads to broad-based improvements in human development, fostering balanced and sustainable progress.
Authors: Bui Thi Thu Thao, Nha T. Nguyen, Na L.H.T. Nguyen
Institution: University of Finance - Marketing
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4411353293