The existing literature is sparse on the role of international finance in modeling the FDI-growth nexus. This study integrates the role of international trade and external debt in the FDI-economic growth nexus for Brazil, Nigeria, and Vietnam. We apply the Autoregressive Distributed Lag (ARDL) model to annual data covering the period 1990-2021. The results show that FDI and trade have positive but insignificant effects on economic growth in all three countries. In addition, our results show that external debt hampers long-term economic growth in these countries. Based on the results, we propose country-specific recommendations that take into account specific economic and financial conditions, global market dynamics, and the long-term development goals of developing countries.

The study provides a deeper understanding of the current role of finance in improving economic development in Vietnam between 1981 and 2019. The study employed the autoregressive distributed lag (ARDL) modelling technique. Based on the long run model estimates, trade openness (TOP) and foreign direct investment (FDI) exert positive but insignificant impact of economic development in Vietnam, while gross capital formation (GFKF) is significant at 10%. Also, exchange rate was found to have negatively influenced economic development, while human development was also important to economic development. This study found that human development and external borrowing is seen to positively impact on economic development in Vietnam. It is recommended that external debt ratio at the threshold of 105% of annual GDP is manageable and beneficial; it is important to attract multinational corporations from developed countries; the government should strengthen and encourage the competitiveness of exports to maintain a sustainable balance with imports and improving the high-quality labor in Vietnam. Request access from your librarian to read this chapter's full text.