Impact of globalization on industrial and service development in Vietnam

Abstract

This study uses the Johansen co-integration test method and error correction model to assess the impact of globalization on the development of industry and services in Vietnam during 1995-2016. Research results show that globalization has an impact on promoting the development of industry and services in Vietnam towards industrialization and modernization. In addition, foreign direct investment, trade balance and exchange rates have a positive impact on the development of industry and services in both short and long term. The research results also show that reserves have a positive effect on long-term industrial and service development. However, this effect is not significant in the short term. Based on the analytical results, the paper proposes a number of recommendations to promote the development of industry and services in Vietnam in the current globalization trend.