The role of foreign direct investment in local economic growth: Evidence from Say Nha Bu Ly Province, Laos
Keywords:
Foreign Direct Investment, Local Economic Growth, Regional Development, Laos, Say Nha Bu Ly Province, Economic DevelopmentAbstract
Foreign Direct Investment (FDI) has become an increasingly important driver of economic growth and structural transformation in developing economies. In recent decades, many developing countries have implemented investment liberalization policies to attract foreign capital, promote industrialization, and enhance regional development. In Laos, FDI has played a significant role in supporting economic modernization, infrastructure development, employment creation, and international economic integration. Against this background, the Lao government has increasingly emphasized the importance of attracting foreign investment to stimulate local economic development and reduce regional disparities. This study examines the role of FDI in promoting local economic growth in Say Nha Bu Ly Province, Laos, during the period 2010–2025. The research employs a mixed-methods approach combining statistical analysis, comparative analysis, and secondary data analysis based on provincial reports, national statistics, and international databases. The study evaluates the contributions of FDI to regional economic performance and identifies the major limitations affecting investment effectiveness. The findings indicate that FDI has contributed positively to Gross Regional Domestic Product (GRDP) growth, employment generation, industrial restructuring, infrastructure development, and government revenue in Say Nha Bu Ly Province. Foreign-invested enterprises have become important contributors to industrial production and economic expansion. However, the study also reveals several challenges, including uneven sectoral distribution of investment, limited technology transfer, low labor quality, and weak spillover effects on domestic enterprises and local industries. The study concludes that improving infrastructure systems, enhancing human resource quality, strengthening local governance, and implementing development-oriented investment policies are essential for increasing the effectiveness and sustainability of FDI in local economic development. The findings provide important policy implications for promoting high-quality and sustainable foreign investment in developing provincial economies.
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