The Role of Transport Infrastructure in Attracting Foreign Direct Investment: Evidence from Vietnamese Provinces/Cities

Abstract

This article aims to analyze the role of transport infrastructure in attracting foreign direct investment (FDI) in 62 provinces/cities of Vietnam. The results from the static and dynamic regressions show that the available transport infrastructure has contributed to the competitiveness among localities in attracting FDI. In addition, FDI inflows into Vietnam are confirmed to be mainly resource-seeking and market-seeking. In-depth analysis using the Generalized Moment Method (GMM) shows that foreign investors increasingly understand the role of investment opportunities in Vietnam. On that basis, the study proposes some important policy implications to help localities have a long-term vision in attracting FDI.