Foreign direct investment in tourism and social development: A regulatory policy context

Vollständiger Abstract

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Foreign direct investment (FDI) has been widely recognized as a crucial driver of socio-economic development, particularly in developing countries; its broader contribution to social development remains insufficiently examined at the subnational level. This study investigates the impact of FDI in tourism on social development across 63 provinces and cities in Vietnam during 2015–2023. The analysis builds on the spillover hypothesis, the tourism-led growth hypothesis (TLGH), and endogenous growth theory, employing panel regression models with data from the General Statistics Office, World Bank, United Nations World Tourism Organization (UNWTO), and related sources. Social development is proxied by human development indicators, while education, gross regional domestic product (GRDP), and urbanization are included as control variables. Fixed effect (FE) estimations demonstrate that FDI in tourism, GRDP, education, and urbanization all exert significant and positive effects on social development. Notably, urbanization exhibits the strongest impact, highlighting the role of structural transformation. These findings highlight the importance of policies that encourage sustainable and high-quality FDI, strengthen human capital, and promote inclusive urban development. The study contributes to the tourism-development literature by extending the analysis of tourism FDI beyond economic growth outcomes toward broader dimensions of social development at the provincial level.