The uncertainty and foreign direct investment in the context of the COVID-19 pandemic of Vietnam

Abstract

During the 1980s, international resource mobility including worldwide capital movement was liberalized. Since then, Foreign Direct Investment (FDI) has continuously grown and expanded worldwide. The emergence of the COVID-19 pandemic and its large-scale outbreak caused significant economic, social and political disruption. In particular, the economic impacts of the pandemic have caused income reduction, increase in unemployment, decrease in aggregate demand, increase in import and export costs and decrease in international trade on a large scale around the world. Since then, the global economic growth has dropped sharply, affecting the trend of global FDI flows, including FDI inflows into Vietnam. Multinational corporations have diverted investments to many countries in order to diversify their supply sources and avoid the negative impacts of trade sanctions and supply chain disruptions. The study aims to present the shifting situation of global FDI flows and FDI in Vietnam in the context of the COVID-19 pandemic; and analyze the current context of the world economic uncertainty (WUI), the world pandemic uncertainty (WPUI), and FDI inflows into Vietnam. From there, the study proposes some recommendations and policy implications to reduce the negative impact of WUI and WPUI due to the global COVID-19 pandemic on the FDI flows into Vietnam.