Quantifying productivity gains from foreign direct investment: The mediating role of provincial institutional quality

Tran Duc Hiep, Bui Hoang Trung and Le Van Chien

Finance Research Letters, 2022, vol. 49, issue C

Abstract: This study contributes to the literature by examining for the first time the influence of foreign direct investment (FDI) and institutional quality on productivity in Vietnamese provinces. Using the generalized method of moments (GMM) method on a large panel dataset from 2010 to 2019, we discover that FDI has a considerable beneficial influence on productivity. When institutional quality is considered, however, provinces with higher-quality institutions do not experience a significant benefit from FDI on productivity. The study also shows that considering productivity as an aggregated index can make it difficult to see the true impact of FDI on productivity.

Keywords: FP index; Institutional quality; Productivity; Decompositions (search for similar items in EconPapers)
JEL-codes: D24 E02 F21 O24 O43 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003877

DOI: 10.1016/j.frl.2022.103174

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