Factors affecting manufacturing output and sustainable FDI attraction solutions in Vietnam

Abstract

The article analyzes factors affecting the output of Vietnam’s manufacturing sector and offers recommendations for sustainable FDI attraction towards green economic development. Using OLS regression on 2013- 2023 data, the study finds that digital transformation, FDI capital, trained labor, and new FDI projects all positively impact manufacturing output, though with varying degrees and timing. Digital transformation notably boosts productivity and FDI attraction but often shows delayed effects due to adaptation and technology implementation. The study also highlights the link between output growth and greenhouse gas emissions, emphasizing the need for sustainable development. Solutions proposed include investing in R&D, developing digital human resources, improving institutions, fostering a technology-friendly investment environment, and encouraging digital and green production, aiming to enhance FDI quality and promote long-term sustainable growth in the manufacturing sector.