Economic and non-economic determinants of FDI inflows in Vietnam: a sub-national analysisPost-Communist Economies

ABSTRACT

This article focuses on identifying the factors that determine FDI inflows at the sub-national level (i.e. provinces/cities) in Vietnam. Based on a longitudinal dataset for the period 2008–2013 of 63 provinces/cities, we examine the impact on FDI of conventional factors (market size, human resources and infrastructures) as well as emerging factors (institutions and policies, domestic and foreign agglomeration) that are suggested by theories in economics and international business. Statistical results show that market size, infrastructure, labour quality, institutions and policies, and agglomeration are major determinants of FDI inflows at the sub-national level in Vietnam. Implications for policy makers and future research are also discussed.

KEYWORDS:

• FDI
• sub-national
• institution
• Vietnam

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Since ‘BRIC’ (i.e. Brazil, Russia, India and China) was named by Goldman Sachs in 2001, emerging and developing economies are continuously classified into different groups as references for investors such as MIST (Mexico, Indonesia, South Korea, Turkey), MINT (Mexico, Indonesia, Nigeria, Turkey), Next 11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, Vietnam), CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa), etc. (Source: http://www.telegraph.co.uk/finance/economics/11158386/Beyond-the-BRICs-the-guide-to-every-emerging-market-acronym.html, retrieved 28 June 2016).

2. https://www.gso.gov.vn

3. http://pcivietnam.org/