The dynamic relationship between greenfield investments, cross-border M&As, domestic investment and economic growth in Vietnam

Hieu Thanh Nguyen; Hiep Ngoc Luu; Ngoc Ha Do

doi:10.1007/s10644-020-09292-7

The dynamic relationship between greenfield investments, cross-border M&As, domestic investment and economic growth in Vietnam

Hieu Thanh Nguyen
, Hiep Ngoc Luu
, Ngoc Ha Do

Research output: Contribution to journal › Article › peer-review

Abstract

This paper investigates the dynamic linkages between different types of foreign direct investment (FDI), domestic investment and economic growth in Vietnam. We decompose the aggregated FDI level into its two major components: greenfield investments, and cross-border mergers and acquisitions (M&As). The empirical results reveal that greenfield investments and cross-border M&As exhibit different impacts on economic growth. While greenfield investments appear to complement domestic investment, which subsequently promotes long-run economic growth, cross-border M&As exert a significant crowd-out effect and subsequently impede growth in both the short- and the long-run. These results provide important implications for policies to attract FDI in order to stimulate sustainable growth.

Original language	English
Number of pages	25
Journal	Economic Change and Restructuring
Volume	First Online
Early online date	8 Aug 2020
DOIs	https://doi.org/10.1007/s10644-020-09292-7
Publication status	E-pub ahead of print - 8 Aug 2020

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities

Keywords

FDI
Greenfield investments
Cross-border M&As
Domestic investment
Growth
SVAR

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title = "The dynamic relationship between greenfield investments, cross-border M\&As, domestic investment and economic growth in Vietnam",

abstract = "This paper investigates the dynamic linkages between different types of foreign direct investment (FDI), domestic investment and economic growth in Vietnam. We decompose the aggregated FDI level into its two major components: greenfield investments, and cross-border mergers and acquisitions (M\&As). The empirical results reveal that greenfield investments and cross-border M\&As exhibit different impacts on economic growth. While greenfield investments appear to complement domestic investment, which subsequently promotes long-run economic growth, cross-border M\&As exert a significant crowd-out effect and subsequently impede growth in both the short- and the long-run. These results provide important implications for policies to attract FDI in order to stimulate sustainable growth.",

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author = "Nguyen, \{Hieu Thanh\} and Luu, \{Hiep Ngoc\} and Do, \{Ngoc Ha\}",

note = "Funding: NAFOSTED (grant number 502.02-2020.09).",

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doi = "10.1007/s10644-020-09292-7",

language = "English",

volume = "First Online",

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TY - JOUR

T1 - The dynamic relationship between greenfield investments, cross-border M&As, domestic investment and economic growth in Vietnam

AU - Nguyen, Hieu Thanh

AU - Luu, Hiep Ngoc

AU - Do, Ngoc Ha

N1 - Funding: NAFOSTED (grant number 502.02-2020.09).

PY - 2020/8/8

Y1 - 2020/8/8

N2 - This paper investigates the dynamic linkages between different types of foreign direct investment (FDI), domestic investment and economic growth in Vietnam. We decompose the aggregated FDI level into its two major components: greenfield investments, and cross-border mergers and acquisitions (M&As). The empirical results reveal that greenfield investments and cross-border M&As exhibit different impacts on economic growth. While greenfield investments appear to complement domestic investment, which subsequently promotes long-run economic growth, cross-border M&As exert a significant crowd-out effect and subsequently impede growth in both the short- and the long-run. These results provide important implications for policies to attract FDI in order to stimulate sustainable growth.

AB - This paper investigates the dynamic linkages between different types of foreign direct investment (FDI), domestic investment and economic growth in Vietnam. We decompose the aggregated FDI level into its two major components: greenfield investments, and cross-border mergers and acquisitions (M&As). The empirical results reveal that greenfield investments and cross-border M&As exhibit different impacts on economic growth. While greenfield investments appear to complement domestic investment, which subsequently promotes long-run economic growth, cross-border M&As exert a significant crowd-out effect and subsequently impede growth in both the short- and the long-run. These results provide important implications for policies to attract FDI in order to stimulate sustainable growth.

KW - FDI

KW - Greenfield investments

KW - Cross-border M&As

KW - Domestic investment

KW - Growth

KW - SVAR

U2 - 10.1007/s10644-020-09292-7

DO - 10.1007/s10644-020-09292-7

M3 - Article

SN - 1573-9414

VL - First Online

JO - Economic Change and Restructuring

JF - Economic Change and Restructuring

ER -

The dynamic relationship between greenfield investments, cross-border M&As, domestic investment and economic growth in Vietnam

Abstract

UN SDGs

Keywords

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