GEOPOLITICAL UNCERTAINTY: SECTORAL DYNAMICS IN VIETNAM’S OUTWARD FOREIGN DIRECT INVESTMENT

Abstract

This study investigates the impact of geopolitical risks on Vietnamese outward foreign direct investment at the sectoral level during the period from 2010 to 2022. The analysis employs a Least square dummy variable regression model. The findings reveal that domestic geopolitical risks tend to increase Vietnamese outward foreign direct investment, while global geopolitical risks- particularly those associated with the United States and China- exert a negative influence. The contributions of this research are threefold: (i) examining the effects of geopolitical uncertainty on outward foreign direct investment at the sectoral level; (ii) highlighting the influence of geopolitical risks originating from major global powers, such as China and the United States, on Vietnam's economic dynamics; and (iii) providing new insights and practical policy recommendations to enhance the effectiveness of Vietnamese outward foreign direct investment strategies amid rising global uncertainty.