The Impact of Foreign Direct Investment and Trade Openness on Economic Development in Lao PDR

Khaysy SRITHILAT, Maketta THAVISAY, Syvanh PHONASA, Visansack KHAMPHENGVONG, Salika PHAVONGXAY

Abstract


The main purpose of this paper is to measure the impact of foreign direct investment and trade openness on economic development in Lao PDR based on the bounds testing approach of Autoregressive Distributive Lag (ARDL). The results reveal that there is the association relationship between a dependent and explanatory variables. Among these, Foreign Direct Investment, Trade Openness and Capital Formation play a crucial role in promoting Laos’ economic development in the long run. However, the evidence of the short run found only in trade openness and capital formation as positive effect on economic development in Lao PDR.

Keywords: FDI, trade openness, development, ARDL, Lao PDR


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ISSN (Paper)2222-1700 ISSN (Online)2222-2855

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