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

In this study, we analyze the spatial effect of foreign direct investment (FDI) on poverty reduction in Vietnam. This study uses the provincial-level panel data and the fixed-effects regression and the spatial econometric model to investigate empirically the impact of FDI on poverty reduction in Vietnam. The study finds that FDI has contributed to poverty reduction not only directly but also indirectly through human capital. However, FDI has indirectly worsened poverty through international trade. In addition, empirical results from the spatial econometric model show that FDI tends to decrease poverty in provinces. Finally, the study has some policy implications to decrease the negative effects of FDI on poverty reduction in Vietnam.

The role of agricultural sectors in the economic development of a country is undeniable, especially in developing and least-developed ones, ensuring food supply, increasing national income, export earnings and poverty reduction. Vietnam is known as an emerging market, depending directly on agriculture-related activities for their livelihood, in which the issue of rural credit access still remains a confounding problem. The paper focuses on identifying the determinants of credit access in rural areas of Vietnam using Haiphong city as a case study, including formal and informal credit. The paper uses data collected from a survey of 180 rural households in a district of Haiphong city. The probit and linear regression models are applied to investigate the factors that determine household credit accessibility, i.e., the household’s decision to borrow and borrowing amounts. Results of this analysis reveal the different significant determinants of formal and informal credit market access. Group membership and connection are found to have significantly strong impacts on formal credit accessibility while informal credit access is strongly influenced by agriculture income and dependency ratio. The implications of these findings for enhancing formal credit accessibility and decreasing the dependence on informal markets are discussed.