Efficiency of Foreign Direct Investment in Ha Tinh Province: Current Situation and Solutions

Abstract

Foreign direct investment (FDI) plays an important role in local socio-economic development. Ha Tinh province is one of the localities in the North Central region that has attracted a large amount of FDI, with large-scale capital associated with metallurgy, energy and seaports, mainly concentrated in Vung Ang Economic Zone. This article uses secondary data to assess the effectiveness of FDI in Ha Tinh province on the basis of interprovincial comparison in the North Central region. The analysis shows that FDI in Ha Tinh produces its clearest economic effects in industrial scale, exports and the formation of the Vung Ang Economic Zone growth pole. However, this effectiveness is uneven and concentrated mainly in manufacturing and electricity/gas, especially the steel industry. FDI in Ha Tinh province is large in scale but highly intensive in capital, natural resources and environmental space. Based on the analysis of the current situation and in order to improve the effectiveness of FDI capital, the article proposes that Ha Tinh province should shift from attracting large-scale capital to governing the effectiveness of FDI, linked with domestic linkages, social infrastructure and enhanced environmental carrying capacity.