How Does the Competitiveness Index Promote Foreign Direct Investment at the Provincial Level in Vietnam? An Integrated Grey Delphi–DEA Model Approach

Abstract

Foreign direct investment (FDI) is an important factor in building a strong economy for a country, particularly in developing and emerging markets. Both domestic enterprises and policy makers have been motivated to attract FDI for the benefits of FDI, such as technological transfers, spillover benefits, and rising competition. There is a need for a functional model to assess how the competitive index affects FDI attractiveness. Therefore, in this study, the authors use an integrated model of Grey Delphi, the Data Envelopment Analysis Super Slack-Based Measure Model (DEA–Super SBM), and the Malmquist Model (DEA–Malmquist) to evaluate the FDI attractiveness of Vietnamese provinces from 2017 to 2021. Firstly, ten critical dimensions of the provincial competitive index (PCI) affecting the number of FDI by cases and amount of FDI capital were validated via the Grey Delphi method. Secondly, the Super-SBM model is applied to assess the FDI efficiency of 63 provinces in Vietnam from 2017 to 2021. Then, the DEA–Malmquist model is employed to analyze the total change in the productivity of 63 provinces’ FDI performance in Vietnam. The findings of this study revealed that the efficiency of FDI in Vietnam’s provinces is relatively low, and there is a significant variation in the attractiveness of FDI among the provinces. This study can provide valuable insights for policy makers and other stakeholders in developing effective strategies to attract FDI and foster economic development.