The effect of Vietnamese migration networks on FDI and bilateral trade between OECD countries and Vietnam

Vietnam is an emerging market with growing trade flows and international investment from high-income countries. It also has an important emigrant diaspora which holds links with the home country. The purpose of this thesis is to test the effect of different categories of Vietnamese migrants†" voluntary, refugees and international students †" on bilateral trade and foreign direct investment between OECD countries and Vietnam. The work is based on panel data concerning 32 OECD countries and Vietnam, during the years 1990 †" 2017. Econometric strategy is based on a gravity model of trade augmented with migration and other cofactors. I use pooled OLS and fixed effects estimations and always control for time effects. The results show that migration affects bilateral trade positively with a stronger effect on exports. Specifically, both immigrants and Vietnamese international students have a positive impact on export. Moreover, international students also affect imports positively and FDI from OECD countries to Vietnam. As expected, refugees have the lowest impact on bilateral trade and FDI, which is not statistically significant in both bilateral trade and FDI equations.