Analyzing the Role of Transport Infrastructure in Attracting Foreign Direct Investment in Vietnam: A Spatial Regression Approach

Abstract

This paper extensively examines the pivotal role of transport infrastructure in facilitating foreign direct investment (FDI) across 62 provinces and cities in Vietnam. The study employs a combination of static and dynamic table regression methodologies to elucidate a compelling correlation between accessible transport infrastructure and the heightened competitive advantage that various localities experience when pursuing FDI. Moreover, a distinct pattern emerges, reaffirming that FDI inflows into Vietnam are primarily propelled by resource-seeking and market-seeking endeavours. By implementing a spatial regression approach, this research delves deeper, unearthing unmistakable indications of a competitive landscape that prevails among the provinces of Vietnam in their quest to attract FDI. Notably, attracting FDI by a specific sector or city initiates a positive ripple effect, resonating throughout neighbouring towns and regions. This phenomenon, rooted in the inherent geographical attributes of these areas, significantly clarifies the pronounced concentration of FDI sources in Vietnam's Northern, Central, and Southern regions.