This study investigates the determinants of cooperation intensity among local governments in promoting Foreign Direct Investment (FDI) within Vietnam's Northern Key Economic Zone (KEZ), which is emerging as a critical hub for FDI but faces significant disparities in FDI distribution across its provinces. The study applies the Institutional Collective Action (ICA) Framework. It is complemented by the Theory of Planned Behavior (TPB) and Risk Aversion Theory to form a comprehensive understanding of how gaps in perception and expectation of benefits, costs, and risks shape cooperative decisions. The findings indicate that while the gap between perception and expectation of benefits and transaction costs does not significantly impact the propensity to intensity of the cooperation, the gap of risks of collaboration is a key determinant. This research emphasizes the need for coordinated strategies to mitigate risks and enhance trust among local governments, offering actionable insights for policymakers to foster more effective intergovernmental collaboration, ultimately optimizing resource allocation and boosting FDI attraction.

Keywords: Local government, Foreign Direct Investment (FDI), Northern zone, Propensity, Theory of Planned Behavior (TPB).

[1] Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2): 179–211.

[2] Axelrod, R., & Keohane, R.O. (1985). Achieving cooperation under anarchy: Strategies and institutions. World Politics, 38(1): 226–254.

[3] Berardo, R., & Scholz, J.T. (2010). Self-organizing policy networks: Risk, partner selection, and cooperation in estuaries. American Journal of Political Science, 54(3): 632–649.

[4] Bernoulli, D. (1954). Exposition of a new theory on the measurement of risk. Econometrica, 22(1): 23–36.

[5] Brown, T.L., & Potoski, M. (2005). Transaction costs and contracting: The practitioner perspective. Public Performance & Management Review, 28(3): 326–351.

[6] Duong Thi Ngu, Do Thu Huong, Dinh Tran Ngoc Huy, Phung Thi Thanh & Dongul, E.S. (2021). Language teaching application to English students at master's grade levels on history and macroeconomic-banking management courses in universities and colleges. Journal of Language and Linguistic Studies, 17(3): 1457–1468.

[7] Feiock, R.C. (2009). Metropolitan governance and institutional collective action. Urb Aff Rev, 44(3): 356–377.

[8] Feiock, R.C. (2013). The institutional collective action framework. Policy Studies Journal, 41(3): 397–425.

[9] Gerber, E.R., & Gibson, C.C. (2005). Economic development and regional governance: Institutional collective action in metropolitan areas. American Journal of Political Science, 49(1): 43–57.

[10] Hanh, H.T., et al. (2020). Impact of macro economic factors and financial development on energy projects- case in ASEAN countries. Management, 24(2).

[11] Kahneman & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2).

[12] Kim, S.Y., Swann, W.L., Weible, C.M., Bolognesi, T., Krause, R.M., Park, A.Y.S., & Feiock, R.C. (2020). Updating the institutional collective action framework. Policy Studies Journal, 48(4): 789–809.

[13] Lê, V.T., & Nguyễn, L.B.Đ. (2017). Phân tích yếu tố ảnh hưởng đến FDI của các tỉnh thành Việt Nam bằng kinh tế lượng không gian. Tạp chí Phát triển Kinh tế, 28(7): 04–33.

[14] Lan, L.T., et al. (2021). Environment issues and feeding mechanism for wild pigs and wild pork processing during EVFTA in Asian countries. International Journal of Ecosystems & Ecology Sciences, 11(4).

[15] Nga, L.T.V., et al. (2021). Reforming specialized inspection procedures to improve business environment in Vietnam for trade facilitation implementation. Management, 25(1).

[16] McGuire, M. (2022). The role of perceived behavioral control in collaborative governance. International Review of Public Administration, 19(2): 34–48.

[17] Moosa, I. (2002). Foreign direct investment: Theory, evidence, and practice. Springer.

[18] Hang, N.T. (2021). Educating and training labor force under Covid 19: Impacts to meet market demand in Vietnam during globalization and integration era. JETT, 12(1): 179–184.

[19] Nguyen, Q.V., Chu, T.N., Tran, T.G.Q., & Pham, T.H. (2014). Assessing the impact of provincial institutional quality on the ability to attract FDI to localities in Vietnam. VNU J. of Sci., Economics and Business, 30(1): 53–62.

[20] Thi Hoa, N., et al. (2021). Human resource for schools of politics and for international relation during globalization and EVFTA. Ilkogretim Online, 20(4).

[21] Nguyen, T.C. (2024). The impact of foreign direct investment on economic growth in Vietnam. Financial and Monetary Market Journal.

[22] Hoang, N.T., et al. (2021). Determining factors for educating students for choosing to work for foreign units: Absence of self-efficacy. JETT, 12(2): 11–19.

[23] Yen, N.D.H., et al. (2023). Analyzing effects of institutional quality on banking stability: evidence From ASEAN countries. International Journal of Professional Business Review, 8(4): e01154–e01154.

[24] Thach, N.N., et al. (2021). Risk management under impacts of macro economic factors in a big seafood Ex-Import Firm-AnGiang Fisheries Ex-Import jsc. in Vietnam. Management, 25(1).

[25] Hai, N.T., et al. (2021). Sustainable business solutions for traditional handicraft product in the northwestern provinces of Vietnam. Management, 25(1): 209–233.

[26] Trung, N.D., et al. (2021). Discussion on Tea and Coffee Planting in Lam Dong and Thai Nguyen Provinces in Vietnam-FDI Investment, Economic Values, Natural Conditions, Farming Techniques for Agricultural sector. Tobacco Regulatory Science, 7(6): 7286–7303.

[27]  Nguyen Hiep & Phan Van Toan (2015). Cooperation between localities in attracting foreign direct investment: The case of cooperation with localities in the Central Key Economic Zone of Binh Dinh province. Journal of Science and Technology, University of Danang, 10(95).

[28] OECD (2008). Benchmark definition of foreign direct investment (4th Eds.). Organisation for Economic Co-operation and Development.

[29] Dat, P., et al. (2020). Comparative China Corporate Governance Standards after Financial Crisis, Corporate Scandals and Manipulation. Journal of Security and Sustainability Issues, 9(3). doi: 9770/jssi.2020.9.3(18).

[30] Shrestha, M.K. (2008). Decentralized governments, networks, and interlocal cooperation in public goods supply. Doctoral Dissertation, Florida State University.

[31] Steinacker, A. (2004). Game-theoretic models of metropolitan cooperation. In Feiock (Eds.), Metropolitan governance: Conflict, competition, and cooperation, Pages 51–72, Georgetown University Press.

[32] Steinacker, A. (2023). Decentralized governance and collective action dilemma: Sub-national governments’ responses to COVID-19 in China. Journal of Political Science, 22(1): 12–34.

[33] Ha, T.T.H., et al. (2019). Modern corporate governance standards and role of auditing-cases in some Western European countries after financial crisis, corporate scandals and manipulation, International Journal of Entrepreneurship, 23(1S).

[34] Xin, G., & Chen, J. (2023). Decentralized governance and collective action dilemma: Sub-national governments' responses to COVID-19 in China. Public Administration and Development, 43(2): 163–175.

Source of Funding:

This study did not receive any grant from funding agencies in the public, commercial, or not–for–profit sectors.

Competing Interests Statement:

The author has not declared any conflict of interest.

Consent for publication:

The author declares that he consented to the publication of this study.

Authors' contributions:

Author’s independent contribution.

Acknowledgement:

Thank you editors, friends to assist this publishing.