Abstract: This study analyzes the roles of private investment, the business environment, and labor productivity in economic growth in the North Central provinces of Vietnam during the period 2010–2023. Based on a panel dataset of six provinces in the region, the study employs Ordinary Least Squares (OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). In addition, the Driscoll–Kraay standard error estimator is applied to address potential issues commonly found in panel data.This study examines the roles of domestic private investment, foreign direct investment (FDI), institutional conditions, and labor productivity in shaping economic growth in Vietnam’s North Central provinces during the period 2010–2023. The empirical results indicate that foreign direct investment (FDI) and the business environment, measured by the Provincial Competitiveness Index (PCI), do not show statistically significant effects on economic growth when controlling for province-specific characteristics. This suggests that these factors have not been directly translated into short-term economic growth in the region. In contrast, domestic private investment and public investment, particularly labor productivity, play a more significant role in promoting regional economic growth. The findings imply that the impacts of FDI and the business environment may be indirect and depend on the absorptive capacity of local economies. Policy implications suggest the need to enhance the quality of FDI, improve the effectiveness of the business environment, and strengthen linkages between the FDI sector and domestic enterprises in order to promote deeper and more sustainable economic growth.

Keywords: Institutional quality, private-sector investment, foreign direct investment, regional economic growth

Pages: 140-148

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