Factors affecting foreign direct investment: Regional Variations in Factors Affecting FDI in Vietnam

The research was conducted to examine the factors that impact on the provincial-level of foreign direct investment (FDI) in Vietnam. This research makes a significant contribution by identifying the factors influencing foreign direct investment with the regional factor key focus of the study and is explored as a meaningful finding. Through statistical data of provinces and cities for the period 2010 – 2022 using the Generalized Least Squares regression, with interaction variables of 6 economy regions of Vietnam, and regional factors also play a significant role in the provincial-level determinants of foreign direct investment (FDI) in Vietnam. The results show that foreign direct investment in Vietnam is influenced by factors such as gross domestic product, production and import turnover of goods, and the quality of human capital, the number of students studying at the high school level and the proportion of the population aged 15 and older who are literate. The gross regional domestic product, trade, human capital has the positive impact on foreign investment capital flows of the provincial-level in Vietnam. Meanwhile, the interplay of regional variables including Central Coast and Central Coast, Central Highlands, Southeast inverts the effect of these factors on FDI streams, suggesting that these regions warrant particular attention for further FDI attraction. From there, the study proposes several recommendations related to the factors that affect foreign direct investment capital to encourage increased ability to attract this capital source in the future.