Influence of Foreign Direct Investment on Tourism Development: An evidence from Vietnam

Vo Thi Van Khanh^1,

¹Department of Business Administration, Academy of Finance, Hanoi, Vietnam

Cite this paper:
Vo Thi Van Khanh. Influence of Foreign Direct Investment on Tourism Development: An evidence from Vietnam. Social and Economic Geography. 2020; 5(1):1-6. doi: 10.12691/seg-5-1-1

Abstract

The purpose of this paper is to investigate the effects of Foreign Direct Investment on Tourism Development in Vietnam. Using an autoregressive distributed lag model (ARDL model) on the data during the period over 2003-2017, collected from World Development Indicators, Department of Statistics in Vietnam. Evidence from the study shows that Foreign Direct Investment and Tourism Development are co-integrated and have a long-run equilibrium relationship. Our results demonstrate that in both short run and long run, Foreign Direct Investment shows a slightly negative impact on Tourism Development in Vietnam. It is noteworthy that the Vietnamese Government share a budget from Foreign Direct Investment on Tourism Development - a lack of priority economic area from Foreign Direct Investment.

Keywords:
foreign direct investment tourism development autoregressive distributed lag model

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]	Alam, A., Malik, O. M., Ahmed, M. and Gaadar, K. “Empirical analysis of tourism as a tool to increase foreign direct investment in developing country: evidence from Malaysia”, Mediterranean Journal of Social Sciences, 6(4). 201-206. Aug.2015.
[2]	Bilen, M., Yilanci, V. and Eryüzlü, H. “Tourism development and economic growth: a panel Granger causality analysis in the frequency domain”, Current Issues in Tourism, 20(1), 27-32. Mar. 2015.
[3]	Broadman, H. G., and Sun, X. “The distribution of foreign direct investment in China”, The World Economy, 20(3), 339-361. May. 1997.
[4]	Fereidouni, H. G. and Al-mulali, U. “The interaction between tourism and FDI in real estate in OECD countries”, Current Issues in Tourism, 17(2), 105-113. Feb. 2014.
[5]	Garcia-Flores, F.; Pérez-Cirera, V.; Martín, P.; Alanis, G.; de Derecho Ambiental, C. M. and Guadarrama, L. “Tourism, trade and the environment: tourism and coastal development in the Mexican portion of the Mesoamerican Reef”, In Fourth North American Symposium on Assessing the Environmental Effects of Trade, Commission for Environmental Cooperation, Montreal. Jan. 2008.
[6]	Gujarati, D., Basic Econometrics. 4th Edition, McGraw-Hill Companies, New York. 2004.
[7]	Haley, U. C. and Haley, G. T. “When the tourists flew in: strategic implications of foreign direct investment in Vietnam’s tourism industry”. Management Decision, 35(8), 595-604. Oct. 1997.
[8]	Hao, H.; Long, P. and Kleckley, J. “Factors predicting homeowners’ attitudes toward tourism: a case of a coastal resort community”. Journal of Travel Research, 50(6), 627-640. Nov. 2011.
[9]	Jayaraman, T. K.; Chen, H. and Bhatt, M. “Contribution of foreign direct investment to the tourism sector in Fiji: an empirical study”. Tourism Economics, 20(6), 1357-1362. Dec. 2014.
[10]	Khoshnevis Yazdi, S.; Homa Salehi, K. and Soheilzad, M. “The relationship between tourism, foreign direct investment and economic growth: evidence from Iran”. Current Issues in Tourism, 20(1), 15-26. Jun. 2015.
[11]	Khoshnevis, Y., S.; Nateghian, N. and Sheikh, R. N. “The causality relationships between tourism development and foreign direct investment: an empirical study in EU countries”. Journal of Policy Research in Tourism, Leisure and Events, 9(1). 1-17. Mar. 2017.
[12]	Li, X., Huang, S., & Song, C. “China’s outward foreign direct investment in tourism”. Tourism Management, 59, 1-6. Apr. 2017.
[13]	Paramati, S. R., Alam, M. S., and Chen, C. F. “The effects of tourism on economic growth and CO2 emissions: a comparison between developed and developing economies”. Journal of Travel Research, 56(6), 712-724. Sep. 2016.
[14]	Pesaran, M. H., Shin, Y. and Smith, R. J., “Testing for the Existence of a Long-Run Relationship”, DAE Working Papers Amalgamated Series, No. 9622, University of Cambridge. 1996.
[15]	Saarinen, J. (2017). “Enclavic tourism spaces: territorialization and bordering in tourism destination development and planning”, Tourism Geographies, 19(3), 425-437. Nov. 2016.
[16]	Salleh, N. H. M., Othman, R., and Sarmidi, T. “An analysis of the relationships between tourism development and foreign direct investment: an empirical study in selected major Asian countries”, International Journal of Business and Social Science, 2(17). 2011.
[17]	Sanford J. D. M., and Dong, H. “Investment in familiar territory: tourism and new foreign direct investment”, Tourism Economics, 6(3), 205-219. Sep. 2000.
[18]	Stauvermann, P. J., & Kumar, R. R. “Productivity growth and income in the tourism sector: role of tourism demand and human capital investment”, Tourism Management, 61, 426-433. Aug. 2017.
[19]	Tang, S., Selvanathan, E. A., and Selvanathan, S. “The relationship between foreign direct investment and tourism: empirical evidence from China”, Tourism Economics, 13(1), 25-39. Mar. 2007.
[20]	UNCTAD. “FDI in Tourism: The Development Dimension”, 2007. [Online] Available: nctad.org/en/Docs/iteiia20075_en.pdf. [Accessed: May 23 2019].
[21]	UNWTO, “Tourism highlights”, 2016. [Online] Available: .org/publication/unwtotourism-highlights-2016-edition. [Accessed: June 13 2019].
[22]	WTTC. “Reports on global tourism”, 2016. [Online] Available: , [Accessed: Retrieved: January 24 2018].
[23]	Zuo, B., & Huang, S. “Revisiting the tourism-led economic growth hypothesis: the case of China”. Journal of Travel Research, 56(2). 151-163. Jan. 2017.