Since the Vietnamese economic reforms in 1986, Viet Nam’s economy has been among the fastest growing countries in ASEAN. Foreign direct investment (FDI) flows is an important factor helping economic growth and development in Viet Nam. This paper explores factors that determine foreign direct investment in Viet Nam from 1988 to 2015. Moreover, the study also examples the northern Bac Ninh province of Viet Nam as one successful case study in attracting FDI inflows in Viet Nam. In the first quarter of 2017, this province has become the leading province in attracting FDI in Viet Nam. By conducting the interviews with two parties directly relating directly to FDI inflows into Viet Nam, who are one foreign investor and one Bac Ninh government official, the study analyzes the determinants of FDI based on motivations of foreign enterprises and the government activities to attract FDI.
The main results show that large market size, openness to trade, better infrastructure development, high quality human capital, government policies and incentives, and lower tax rate are factors attracting FDI inflows into Viet Nam. However, at this stage of research, we have not found a strong relationship between growth rate, and inflation rate and growth rate FDI attraction in Viet Nam. More study is needed to gain a better understanding on this aspect.

Since the Vietnamese economic reforms in 1986, Viet Nam’s economy has been among the fastest growing countries in ASEAN. Foreign direct investment (FDI) flows is an important factor helping economic growth and development in Viet Nam. This paper explores factors that determine foreign direct investment in Viet Nam from 1988 to 2015. Moreover, the study also examples the northern Bac Ninh province of Viet Nam as one successful case study in attracting FDI inflows in Viet Nam. In the first quarter of 2017, this province has become the leading province in attracting FDI in Viet Nam. By conducting the interviews with two parties directly relating directly to FDI inflows into Viet Nam, who are one foreign investor and one Bac Ninh government official, the study analyzes the determinants of FDI based on motivations of foreign enterprises and the government activities to attract FDI.
The main results show that large market size, openness to trade, better infrastructure development, high quality human capital, government policies and incentives, and lower tax rate are factors attracting FDI inflows into Viet Nam. However, at this stage of research, we have not found a strong relationship between growth rate, and inflation rate and growth rate FDI attraction in Viet Nam. More study is needed to gain a better understanding on this aspect.

ABSTRACT I
ACKNOWLEDGEMENT II
LIST OF CONTENT III
LIST OF FIGURES IV
LIST OF TABLES 5
CHAPTER 1 INTRODUCTION 1
1.1 Background and Motivation 1
1.2 An overview of FDI in Viet Nam 1
1.3 Objectives 8
1.4 Research framework 9
CHAPTER 2 LITERATURE REVIEW 10
2.1 Economic determinants 12
2.2 Non-economic determinants 15
CHAPTER 3 RESEARCH METHODOLOGY 27
3.1 Research methodology 27
3.2 Interview questions 27
CHAPTER 4 CASE ANALYSIS 30
4.1 Motivation 30
4.2 Determinants of FDI attraction in Viet Nam 31
4.3 Challenges of FDI attraction 41
CHAPTER 5 CONCLUSION AND RECOMMENDATION 44
5.1 Conclusion 44
5.2 Recommendation 45
5.3 Limitations and future work 46
REFERENCES 47
WEBSITES 53
APPENDIX 1: ABBREVEATIONS 54