The Impact of Foreign Direct Investment on Income Inequality in Vietnam

Foreign direct investments (FDI) is an important determinant of economic growth. FDI does not only contribute to the growth and development but also affects income through contributing impact on employment salary structure developing countries. The aim this paper analyze inequality in Vietnam. This study first attempt examine under constraints institution education levels. To address potential endogeneity problem, adopts Genernalized Method Moment (GMM) model conduct estimation. A two-step GMM with robust standard errors used study. Empirical results show that tends increase Vietnam existence a non-linearity relationship between validated. Moreover, finds effects are different depending level institutions host provinces imply that, order ensure sustainable development, Vietnam’s policies should focus improving quality governance administrative reform efforts government cities. Besides, increasing investment public human capital, which can reduce attract more inflows.