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Evaluating the Influence of Criteria to Attract Foreign Direct Investment (FDI) to Develop Supporting Industries in Vietnam by Utilizing Fuzzy Preference Relations

Author

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  • Tien-Chin Wang

    (Department of International Business, National Kaohsiung University of Applied Sciences, No.415, Chien Kung Road, Sanmin District, Kaohsiung 80778, Taiwan)

  • Chia-Nan Wang

    (Department of Industrial Engineering and Management, National Kaohsiung University of Applied Sciences, No.415, Chien Kung Road, Sanmin District, Kaohsiung 80778, Taiwan)

  • Xuan Huynh Nguyen

    (Department of International Business, National Kaohsiung University of Applied Sciences, No.415, Chien Kung Road, Sanmin District, Kaohsiung 80778, Taiwan
    Faculty of Economic, Hung Yen University of Technology and Education, Khoai Chau District, Hung Yen Province, Vietnam)

Abstract

In the early 2000s, Vietnam’s government concentrated on the promotion of supporting industries which can be seen as a “key” solution to sustaining economic growth, thereby improving the national welfare. However, Vietnam’s supporting industries still exhibit lower development and competitive weakness. The main reason for this condition is due to a lack of capital, technological innovation, and necessary management skills for development. Therefore, attracting foreign direct investment (FDI) for developing supporting industries offers the best strategy to realize this solution. However, attracting FDI to develop supporting industries represents a weakness which lies in both the quantity (total capital and projects) and quality of investment. So which factors are effective to attract FDI for developing supporting industries in Vietnam? This investigation establishes an analytical hierarchy framework available to the Vietnamese government and to policymakers in order to evaluate the influence of criteria needed to attract FDI for developing supporting industries based on eight main criteria. They include legal and institutional criteria, the market size of supporting industries, human resources, infrastructure facilities, technological development and innovation, domestic supply capacity, international cooperation and competition, and other criteria. This paper uses fuzzy preference relations (FPR) to evaluate the influence of criteria necessary to attract FDI for developing supporting industries, and these analytical results demonstrate that legal and institutional criteria, domestic supply capacity, human resources, technology development and innovation are all major considerations for attracting FDI.

Suggested Citation

  • Tien-Chin Wang & Chia-Nan Wang & Xuan Huynh Nguyen, 2016. "Evaluating the Influence of Criteria to Attract Foreign Direct Investment (FDI) to Develop Supporting Industries in Vietnam by Utilizing Fuzzy Preference Relations," Sustainability, MDPI, vol. 8(5), pages 1-14, May.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:5:p:447-:d:69541
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    2. Yang, Ruicheng & Xing, Weize & Hou, Shuxia, 2020. "Evaluating the risk factors influencing foreign direct investment in Mongolia's mining sector: A complex network approach," Emerging Markets Review, Elsevier, vol. 43(C).
    3. Tien-Chin Wang & Hsiu-Chin Hsieh & Xuan-Huynh Nguyen & Chin-Ying Huang & Jen-Yao Lee, 2022. "Evaluating the Influence of Criteria Revitalization Strategy Implementation for the Hospitality Industry in the Post-Pandemic Era," World, MDPI, vol. 3(2), pages 1-18, April.
    4. Hsiu-Chin Hsieh & Xuan-Huynh Nguyen & Tien-Chin Wang & Jen-Yao Lee, 2020. "Prediction of Knowledge Management for Success of Franchise Hospitality in a Post-Pandemic Economy," Sustainability, MDPI, vol. 12(20), pages 1-27, October.

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