Private Investment and Economic Development: Ensuring Sustainability in the Future

Abstract

Objectives: The objectives of this study are 1) to examine the role of private investment in economic development towards sustainability in Vietnam by utilizing provincial-level data from the period 2000–2020 and 2) to construct an economic development index based on four main pillars: economy, science and technology, energy models, and multidimensional poverty. Methods/Analysis: The study employed the CS-ARDL estimation method to investigate the short-and long-term relationships between private investment and economic development. Furthermore, to address issues related to slope heterogeneity, endogeneity, and cross-sectional dependence, the study applied the AMG and CCEMG models to assess this relationship in the long term. Findings: The study identified a positive long-term relationship between private investment and economic development. Additionally, investment in science and technology, agricultural land urbanization, vocational training for labor, trade openness, and private sector finance exhibited significant associations with private investment. Novelty/Improvement: The study successfully developed an economic development index and elucidated the relationship between private investment and economic development. The research underscores two critical strategies for attracting and promoting private sector investment: improving the workforce through training and expanding export markets. The effective implementation of these strategies can address subsequent challenges and expedite sustainable economic development progress.