ISSN: 2520-4750 (Online), 2521-3040 (Print)

The Impact of AFTA on Trade Openness, and Foreign Direct Investment: The Empirical Evidence from Lao PDR

 Author (s)

Salucknai Outtanasith & Khaysy Srithilat

Abstract

This study looks at how the AFTA has affected trade openness, foreign direct investment, and economic growth in Lao PDR. The impact of AFTA on trade openness and foreign direct investment (FDI) entering Laos is examined using the gravity model method. To examine the long-term connection between variables, Panel Vector Error Correction and Pedroni Cointegration based on Fully Modified Ordinary Least Squares (FMOLS) were also used. The findings show that infrastructure development, disparities in factor endowments between the two nations, the GDP of Laos, and the country’s shared border all have a beneficial impact on the entrance of foreign direct investment into the Lao PDR. Moreover, depreciation of domestic currency, sharing border with neighboring countries, and AFTA member countries are also significantly positive effect on trade openness in Lao PDR. However, the distance between the capital city is negatively effect on foreign direct investment and trade in Laos in the long run.

 

Keywords: AFTA, FDI, Trade, Regional Integration, Gravity Model, Lao PDR.

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Title:The Impact of AFTA on Trade Openness, and Foreign Direct Investment: The Empirical Evidence from Lao PDR
Author:Salucknai Outtanasith & Khaysy Srithilat
Journal Name:International Journal of Science and Business
Website:ijsab.com
ISSN:ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)
DOI:https://10.5281/zenodo.7047719
Media:Online
Volume:16
Issue:1
Issue publication (Year):2022
Acceptance Date:02/09/2022
Date of Publication:04/09/2022
PDF URL:https://ijsab.com/wp-content/uploads/981.pdf
Free download:Available
Page:142-152
First Page:142
Last Page:152
Paper Type:Research paper
Current Status:Published

 

Cite This Article:

Salucknai Outtanasith & Khaysy Srithilat (2022). The Impact of AFTA on Trade Openness, and Foreign Direct Investment: The Empirical Evidence from Lao PDR. International Journal of Science and Business, 16(1), 142-152. doi: https://doi.org/ 10.5281/zenodo.7047719

Retrieved from https://ijsab.com/wp-content/uploads/981.pdf

About Author (s)

Salucknai Outtanasith, School of International Trade and Economics, University of International Business and Economics, Beijing, China.

Khaysy Srithilat , Faculty of Economics and business Management, National University of Laos, Vientiane, Laos.

 

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DOI: https://doi.org/10.5281/zenodo.7047719

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