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has been cited by the following article:

• TITLE: The Effect of FDI on the Relationship between Fiscal Decentralisation and Economic Growth in Vietnam: Empirical Evidence from Provincial Data

  AUTHORS: Nguyen Van Bon

  KEYWORDS: Fiscal Decentralization, Economic Growth, FDI, Two-Step GMM Estimators, Vietnam

  JOURNAL NAME: Theoretical Economics Letters, Vol.9 No.6, August 29, 2019

  ABSTRACT: Fiscal decentralization not only promotes economic growth but brings more power to local governments in attracting FDI inflows as well. However, economists and policy-makers often strongly debate the influence of FDI on the fiscal decentralization-growth relationship. This paper empirically investigates the role of FDI in the relationship between fiscal decentralization and economic growth for a panel dataset of 52 provinces in Vietnam during the period 2007-2016 using the two-step GMM Arellano-Bond and FE-2SLS estimators. The estimated results confirm that fiscal decentralization and FDI significantly enhance economic growth, but their interaction terms impede growth rate. In addition, public investment is a significant determinant. These findings suggest some important policy recommendations for central governments in developing countries, especially Vietnam.