Article: Unveiling the nexus between foreign direct investment and economic restructuring: evidence from Vietnam's transformative journey Journal: International Journal of Economics and Business Research (IJEBR) 2025 Vol.29 No.11 pp.52 - 76 Abstract: This study interrogates the complex dialectical relationship between foreign direct investment (FDI) and structural economic transformation in Vietnam's transitional context. While extant literature explores FDI-growth connections globally, the mechanisms through which FDI catalyses sectoral reallocation remain undertheorised in rapidly industrialising economies. Employing system GMM estimation on provincial panel data (201-2020), the epistemic trajectory reveals FDI's significant positive impact on economic restructuring - intensified by human capital development, trade openness, and institutional quality. The hermeneutic analysis uncovers a critical threshold effect, demonstrating FDI's transformative potential amplifies once inflows reach 18.5% of provincial GDP. Furthermore, substantial regional heterogeneity emerges, with North and South regions exhibiting stronger FDI-restructuring nexuses than the Central region, suggesting geographical and historical development pathways significantly moderate outcomes. This transdisciplinary scholarship contributes a sophisticated conceptual framework for understanding FDI's role in structural transformation across diverse institutional contexts. Inderscience Publishers - linking academia, business and industry through research

Title: Unveiling the nexus between foreign direct investment and economic restructuring: evidence from Vietnam's transformative journey

Authors: Vu Hiep Hoang; Thi Van Anh Vu; Thi Lan Huong Le; Van Hoa Hoang; Thi Van Hoa Tran; Van Nam Le

Addresses: National Economics University, 207 Giai Phong Rd., Hanoi, Vietnam ' National Economics University, 207 Giai Phong Rd., Hanoi, Vietnam ' National Economics University, 207 Giai Phong Rd., Hanoi, Vietnam ' National Economics University, 207 Giai Phong Rd., Hanoi, Vietnam ' National Economics University, 207 Giai Phong Rd., Hanoi, Vietnam ' National Economics University, 207 Giai Phong Rd., Hanoi, Vietnam

Abstract: This study interrogates the complex dialectical relationship between foreign direct investment (FDI) and structural economic transformation in Vietnam's transitional context. While extant literature explores FDI-growth connections globally, the mechanisms through which FDI catalyses sectoral reallocation remain undertheorised in rapidly industrialising economies. Employing system GMM estimation on provincial panel data (201-2020), the epistemic trajectory reveals FDI's significant positive impact on economic restructuring - intensified by human capital development, trade openness, and institutional quality. The hermeneutic analysis uncovers a critical threshold effect, demonstrating FDI's transformative potential amplifies once inflows reach 18.5% of provincial GDP. Furthermore, substantial regional heterogeneity emerges, with North and South regions exhibiting stronger FDI-restructuring nexuses than the Central region, suggesting geographical and historical development pathways significantly moderate outcomes. This transdisciplinary scholarship contributes a sophisticated conceptual framework for understanding FDI's role in structural transformation across diverse institutional contexts.

Keywords: foreign direct investment; FDI; economic restructuring; emerging market; panel data; Vietnam; threshold dynamic panel; regional heterogeneity.

DOI: 10.1504/IJEBR.2025.145707

International Journal of Economics and Business Research, 2025 Vol.29 No.11, pp.52 - 76

Received: 18 Nov 2024
Accepted: 16 Mar 2025
Published online: 15 Apr 2025 *

Title: Unveiling the nexus between foreign direct investment and economic restructuring: evidence from Vietnam's transformative journey

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