From Borders to Provinces: How Trade and FDI Shape Local Growth in a Developing Economy

This article investigates the impact of international trade and foreign direct investment (FDI) on provincial economic growth in Vietnam, using the system generalized method of moments (GMM) estimator with panel data from all 63 provinces (2010 to 2021). The findings indicate that FDI capital and import growth exert positive effects on provincial economic performance, whereas the number of FDI enterprises and other trade-related factors do not show significant impacts. The study provides valuable insights for policymakers seeking to enhance economic growth through targeted trade and FDI strategies, recommending Vietnam prioritize high-quality FDI and productive imports to strengthen provincial industries and competitiveness.