Pattern to Absorb Foreign Direct Investment’s Benefts: Perspective from Vietnam

Abstract

Many developing countries seek to attract and enlarge their FDI placements, but do not recognize that certain initial conditions must be in place to absorb FDI benefits. The paper proposes factors which argue that a recipient developing country only achieves benefits from FDI once it has sufficient human capital resources, absorptive capacity of domestic firm, financial systems, physical infrastructure, technological, and institutional development. Some policies that improve host country absorptive capacities are recommended.