Impact of foreign investment on household welfare: Evidence from Vietnam

Abstract

We examine the impact of foreign direct investment in Vietnam on household and individual welfare and on migration using survey data for the period 2002 to 2016. We find that higher revenue from foreign invested firms measured at province level and normalized on population is associated with a variety of positive outcomes. At household level, income and expenditures per capita are higher and poverty incidence is lower. At individual level, non-farm employment and wages are higher. And at commune level, in-migration is higher. However, although these improvements register as statistically signficant, the magnitudes in economic terms are modest.