Increasing competitiveness as a factor in attracting investments (based on Vietnam)

The purpose of the study is to examine role of competitiveness in determining foreign direct investment (FDI) inflows. As a means to achieve this, the study undertakes an empirical analysis of data during the period 2017-2021 stemming from Provincial Competitiveness Index (PCI) and Foreign Direct Investment in all provinces of Vietnam. The findings showed that investment attraction was inextricably linked to six sub-indices pertaining to labour training, time costs, business support services, informal costs, dynamicity and access to land resources. Enhancing competitiveness therefore lies at giving a boost to the investment's determinants in Vietnamese provinces where a lack of time-bound synergy between the authorities and enterprises results in impaired dynamicity of leadership and restrictions to business support services. Scientific novelty lies in providing an additional approach to assess the impact of the PCI in investment attraction. The empirical findings would benefit policymakers in improving quality of provincial governance institutions in order to attract more FDI at provincial level.