The key driver to FDI’s attraction in Vietnam in the context of digital transformation

Abstract

Foreign Direct Investment (FDI) is a key driver of economic growth in developing countries like Vietnam, fostering global integration through capital inflows, technology transfer, and managerial expertise. This study explores how Vietnam can enhance FDI attractiveness amid digital transformation by addressing barriers in digital infrastructure, human resources, and investment policy. Using Principal Component Analysis (PCA), the research highlights the impact of digital infrastructure, a skilled digital workforce, the regulatory environment, and technology-focused FDI on investment inflows. The findings identify critical factors influencing FDI decisions and emphasize the importance of improving digital infrastructure, developing a competent tech workforce, reforming regulations, and strengthening innovation ecosystems. These strategies are essential for attracting FDI in high-tech sectors and supporting Vietnam’s long-term economic growth.