Factors Affecting Capital Attraction for Economic Development: A Case Study of Ho Chi Minh City during COVID-19 Pandemic

Nga Phan Thi Hang


As the COVID-19 pandemic continues globally, competition to attract capital flows will become increasingly difficult. Not only Vietnam but other countries are also increasing their attraction to promote resilience after the pandemic. With the advantage of being a city located in the critical economic zone, Ho Chi Minh City (HCMC) has many potentials and opportunities in terms of investment attraction. In the context that the COVID-19 pandemic has been causing significant impacts, the HCMC persisted in its growth goals, implemented many solutions to attract resources, and called for substantial investments in meaningful projects. Besides, HCMC needs to prepare carefully to realize the opportunity to become a new production center in Southeast Asia. The research goals are to determine critical factors affecting capital attraction for economic development in HCMC during the COVID-19 pandemic, thereby identifying appropriate policy recommendations to develop the economy. The author surveyed 700 investors are working for the enterprises in HCMC. The author had tested the exploratory factor analysis (EFA), confirm factor analysis (CFA), and structural equation modeling (SEM). Finally, the scientific novelty showed five factors affecting capital attraction for economic development in HCMC with a significance of 1.0 percent. Five determinants included (1) policy framework, (2) market search, (3) resource search, (4) efficient search, and (5) institutional quality.


Keywords: capital attraction, economic development, COVID-19 pandemic.

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