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Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
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Published: 18 January 2024

Political Risk Impacts on Foreign Direct Investment in Vietnam

Tran Binh Nguyen

University of the West of England, United Kingdom

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

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doi

10.31014/aior.1992.07.01.556

Pages: 14-26

Keywords: Political Risk, Foreign Direct Investment, Vietnam, International Country Risk Guide, Governance Quality, Military Involvement, Economic Stability

Abstract

The research explores the impact of political risk on foreign direct investment in Vietnam. The dataset for political risk employed in this research consists of twelve factors from the International Country Risk Guide, offering a comprehensive assessment of Vietnam's political landscape. The research utilises Principal Component Analysis to consolidate twelve political risk items, examining their influence alongside GDP growth, inflation rate and trade openness. With data spanning from 1994 to 2021, ARIMA models are employed due to non-stationarity issues from secondary data set. The findings indicate that while economic factors contribute to FDI, political risk variables like governance quality, military involvement, and economic stability have profound impacts. The study suggests that enhancing governance and reducing military politics are key to attracting FDI, offering insights for policymakers and investors to navigate Vietnam's investment landscape.

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