GREEN LOGISTICS AS A DETERMINANT OF FDI INFLOWS: EVIDENCE FROM A GRAVITY MODEL FOR VIETNAM

Abstract

This study analyzes the impact of home countries' green logistics capabilities on foreign direct investment (FDI) inflows into Vietnam, in the context of sustainable development reshaping global supply chains. Employing bilateral panel data from 31 partner countries from 2007 to 2023, the study applies a gravity model and introduces a novel metric, the Environmental Logistics Performance Index (ELPI). Through two robust estimation methods, Fixed-Effects with Driscoll-Kraay standard errors (FE-DK) and Poisson Pseudo-Maximum Likelihood (PPML), the results indicate that the ELPI has a positive and statistically significant effect on both FDI stock and annual inflows. This relationship remains robust after controlling for economic and institutional factors. The findings suggest that green logistics is a significant location determinant, thereby providing policy implications for attracting high-quality FDI aligned with Vietnam's sustainable development goals.