Abstract
This paper focuses on building research model and analyzing the main factors influencing foreign direct investment (FDI) attraction in the Southern Key Economic Region during the period of 2005 - 2016. Based on theories and empirical studies, the authors identified the key factors that affect FDI attraction in that area. Through the development of hypotheses, a quantitative research mode l with Stata software help ed to select an estimation method with reliable and effective test results. The selected research method was the estimation method according to 3 approaches: OLS (P OOLED Regress Model) the least estimation method, Fix Effect Model (FEM), and Random Effect Model (REM). The research model used was the Panel Data model. The author performed the test hypotheses for the factors affecting FDI attraction in the Southern Key Economic Region. After regression with 3 methods (POOLED, FEM, and REM), and using F-Test and Breusch Pagan Test, the aim was to estimate the efficiency of the model and consider the simultaneous effects of independent variables on the dependent variable. These include d the following factors: market size, infrastructure, labor force, quality of human resources, market openness, trade openness, and institutional quality. Examining the relationship between market size, infrastructure development, labor force, quality of human resources, trade openness and institutional quality of FDI attraction into the Southern Key Economic Region, the authors select ed the Pooled Regression Model. The results of this paper may partly help policymakers to have an overall vision and may contribute to the development of appropriate solutions and strategies to attract and effectively use foreign direct investment capital to promote the socio-economic development of the region. Furthermore, the findings may contribute to guidelines to attract and make better use of these funds in the future, better serving the economic development of this region.
Highlights
The Southern Key Economic Region is a special area in Vietnam which has an important role in the socioeconomic development of the country
The statistical results show that the mean values of the factors are quite high, for the average number of projects, Gross domestic product (GDP), volume of goods transported on land land-river-air routes, and labor force
The provincial competitiveness index (PCI) is higher than average, indicating that the region has improved the Provincial Competitiveness Index (PCI) in the current stage of development
Summary
The Southern Key Economic Region is a special area in Vietnam which has an important role in the socioeconomic development of the country. This region consists of 8 provinces and central cities: Ho Chi Minh City, Binh Phuoc, Tay Ninh, Binh Duong, Dong Nai, Ba Ria - Vung Tau, Long An, and Tien Giang. The identification of key factors affecting the attraction of FDI in the Southern Key Economic Region is important and urgent Starting from these objectives and requirements, we selected the topic “Factors affecting foreign direct investment capital in the Southern Key Economic Region” to clarify research issues. The main objective of this paper is to develop a research model to analyze the key factors affecting the
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