Does Private Investment Promote Multidimensional Poverty Reduction in a Sustainable Way? A Spillover Analysis

This study examines the role of private investment in promoting multidimensional poverty reduction in a sustainable manner in Vietnam by analyzing both spatial and temporal spillover effects. Provincial panel data for 2010–2024 are employed. To assess the spatial spillover effects, three econometric models are applied: SAR, SEM, and SDM. Diagnostic tests suggest that the SDM model is the most appropriate for the research data. Results based on the contiguity and inverse distance weight matrices show that private investment not only reduces poverty in recipient provinces but also generates benefits for neighboring areas, highlighting the need for coordinated planning of industrial zones and regional economic hubs. To analyze this relationship over both the short-term and long-term horizons, the study employs PMG and CCEP estimators, while the DCCEP model verifies robustness in a dynamic framework. The findings consistently confirm that private investment contributes to multidimensional poverty reduction. An additional result from the DCCEP model indicates that literacy and urbanization rate have significant positive effects on poverty reduction, while these relationships are not detected in other models. This finding carries important implications for building an enabling investment environment to attract and effectively utilize private capital to implement multidimensional poverty reduction strategies towards sustainability and aligned with sustainable development objectives.