What drives the satisfaction and loyalty of foreign investors in a locality? Empirical evidence in Nghe An, Viet Nam

Dang, Thanh Cuong; Banh, Thi Thao; Tran, Van Hao; Trinh, Thi Hang; Nguyen, Thi Thu Cuc Article What drives the satisfaction and loyalty of foreign investors in a locality? Empirical evidence in Nghe An, Viet Nam Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Dang, Thanh Cuong; Banh, Thi Thao; Tran, Van Hao; Trinh, Thi Hang; Nguyen, Thi Thu Cuc (2024) : What drives the satisfaction and loyalty of foreign investors in a locality? Empirical evidence in Nghe An, Viet Nam, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-17, https://doi.org/10.1080/23311975.2024.2353847 This Version is available at: https://hdl.handle.net/10419/326289 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 What drives the satisfaction and loyalty of foreign investors in a locality? Empirical evidence in Nghe An, Viet Nam Thanh Cuong Dang, Thi Thao Banh, Van Hao Tran, Thi Hang Trinh & Thi Thu Cuc Nguyen To cite this article: Thanh Cuong Dang, Thi Thao Banh, Van Hao Tran, Thi Hang Trinh & Thi Thu Cuc Nguyen (2024) What drives the satisfaction and loyalty of foreign investors in a locality? Empirical evidence in Nghe An, Viet Nam, Cogent Business & Management, 11:1, 2353847, DOI: 10.1080/23311975.2024.2353847 To link to this article: https://doi.org/10.1080/23311975.2024.2353847 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group View supplementary material Published online: 04 Jun 2024. Submit your article to this journal Article views: 694 View related articles View Crossmark data Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Accounting, corporAte governAnce & Business ethics | reseArch Article Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2353847 What drives the satisfaction and loyalty of foreign investors in a locality? Empirical evidence in Nghe An, Viet Nam thanh cuong Danga , thi thao Banha , van hao tranb , thi hang trinha and thi thu cuc nguyena aBanking and Finance, Vinh university, nghe an, Viet nam; bManagement administration, Vinh university, nghe an, Viet nam ABSTRACT the study aims to examine the factors affecting the satisfaction and loyalty of foreign investors in a locality through ‘hard’ infrastructure and ‘soft’ infrastructure factors. the author used cronbach’s Alpha, eFA, and seM to analyze primary data and test the hypothesis. the findings indicate that factors such as infrastructure, human resources, investment policy, living environment, local Brand, Quality of public services, and local Advantages impact FDi investors’ satisfaction. Meanwhile, competitive input costs are the only factor affecting the loyalty of FDi investors which differs from previous research. these results serve as a crucial foundation for vietnamese municipalities to implement various strategies to enhance satisfaction and bolster the loyalty of FDi investors, ultimately amplifying the draw of foreign direct investment into the area. 1. Introduction With the strong scientific and technological revolution and international integration, foreign investment has become a crucial factor in the economic development of every nation and region. A country like vietnam, with many local economies that are still extremely impoverished and underdeveloped, cannot rely solely on limited domestic capital. thus, outside investment capital, particularly foreign direct investment (FDi), is crucial. in addition to providing communities with much-needed capital, FDi also indirectly assists the government in more sensibly adjusting and allocating budgetary resources to localities and territories, creating a ‘push’ for their economic development. reality shows that FDi has been still a crucial source of capital supplementation for the developing economy in recent years, helping to satisfy the demands of investment development and economic expansion (Dang et al., 2023). nghe An province, which is located in vietnam’s north central area, consistently decides that FDi flow would be a crucial capital flow and a motivating factor to accelerate socioeconomic development. nghe An province has taken numerous measures to boost FDi attractiveness since it began to draw in investment (in 1992), but the results have not been as good as expected. Although FDi has expanded, most of it is going toward small-scale projects with relatively low implementation costs. While FDi enterprises have contributed to the socio-economic development of nghe An province, it is still relatively minor in comparison to the potential of the local community and does not bring contemporary technology to the locality. projects that create momentum for strong socio-economic © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT thi thao Banh [email protected]om Vinh university, nghe an, Viet nam thanh Cuong Dang is the first author. supplemental data for this article can be accessed online at https://doi.org/10.1080/23311975.2024.2353847. https://doi.org/10.1080/23311975.2024.2353847 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY received 21 January 2024 revised 2 May 2024 Accepted 6 May 2024 KEYWORDS FDi; FDi investors; satisfaction; loyalty; locality JELS F23; F21 REVIEWING EDITOR collins ntim, university of southampton, united Kingdom of great Britain and northern ireland SUBJECTS international Business; Business, Management and Accounting; international economics 2 t. c. DAng etAl. development are not many, and their contribution to provincial grDp and provincial budget revenue is still low… upon establishing the primary objective, it becomes apparent that nghe An province ought to embrace more intricate and resilient strategies to allure FDi funds. emphasizing meeting satisfaction of foreign investors engaged in local investment emerges as the most efficacious approach to attract FDi. the favorable and successful business outcomes achieved by these FDi enterprises are poised to yield amplified inflows of FDi capital, consequently bolstering the province’s position within the local economy and fostering heightened interest among additional foreign investors. in other words, the province needs to consider investors as its customers that it must satisfy and retain. A locality can attract numerous foreign investors by meeting their desires through internal factors and the quality of services they provide, ultimately leading to investor satisfaction. effective FDi attraction strategies will increase investor satisfaction - understanding their needs, desires, and the factors that maintain their loyalty to the locality. Answering the question: ‘What drives the satisfaction and loyalty of FDi investors?’ is not only necessary to satisfy current foreign investors but also helps to attract more potential foreign investors in the future. research on customer loyalty and satisfaction has been done a lot before, but mainly in the fields of goods production and services, not for foreign investors. Most of the previous studies about FDi have been on factors affecting FDi attraction, the effectiveness of FDi, and the impact of FDi on the socio-economy of a locality or country, and there have not been many studies on the satisfaction or loyalty of foreign investors. therefore, a thorough investigation into the factors impacting investor satisfaction, loyalty, and their interconnectedness within the local context remains insufficiently addressed. specifically, there is a requirement for a quantitative assessment of these influencing factors. this constitutes the foundational understanding necessary to elucidate why this locality garners more FDi compared to others. hence, there is a need for a scientific assessment of the relationship between the satisfaction and loyalty of foreign investors at the local level in vietnam, to derive pertinent policy implications. this article concentrates on examining the influencing factors on the satisfaction and loyalty of foreign investors, thereby informing policy implications for the locality. Furthermore, the findings of this research contribute to further validating the theoretical frameworks within a specific locale. 2. Literature review and hypothesis development numerous studies have been conducted presenting various definitions of service quality. there exists a pronounced distinction between service quality and product quality, where product quality is assessed through specific technical criteria while service quality stems from customer perceptions. in other words, the individual determining the evaluation outcome of service quality is the customer. According to parasuraman et al. (1985), ‘service quality is the customer’s satisfaction measured by the difference between expected and perceived quality’. similarly, to the various definitions of service quality, there exist diverse interpretations and debates regarding customer satisfaction. According to hansemark and Albinsson (2004), ‘customer satisfaction is an overall attitude of the customer toward a service provider, or an emotional response to the discrepancy between what customers anticipate and what they receive, regarding the fulfillment of certain needs, goals, or desires’. Kotler et al. (2002) define it as ‘customer satisfaction is a feeling of pleasure or disappointment resulting from the comparison of perceived performance (or results) with their expectations’. service quality and satisfaction are closely intertwined (parasuraman etal., 1988). research findings by parasuraman et al. (1988) indicated that higher perceived service quality leads to greater customer satisfaction. studies by Buttle (1998), lee etal. (2000), and gilbert and veloutsou (2006) also demonstrated that service quality results in customer satisfaction. to achieve a high level of customer satisfaction, most researchers assert that high service quality must be delivered by service providers, as service quality is commonly perceived as a precursor to customer satisfaction (shanka, 2012). As service quality improves, customer satisfaction increases. Quality is just one of several aspects upon which satisfaction relies; satisfaction is also a potential predictor of future quality perceptions. siddiqi (2011) described how all service quality attributes are positively associated with customer satisfaction and customer satisfaction is positively linked to customer loyalty in retail banking settings. Furthermore, Auka (2012) also contends that service quality leads to high customer satisfaction and increased loyalty. cogent Business & MAnAgeMent 3 customer loyalty is defined as a sustainable relationship between an individual’s attitude and repurchasing, symbolized by the ratio, coordination, and ability to repurchase from the same supplier (Dick & Basu, 1994). there are three primary approaches to studying customer loyalty that are behavioral approach by seiders etal. (2005), the attitude approach by Jacoby and chestnut (1978), and the composite research approach. loyalty in behavior is often manifested in a behavior-based approach concerning future repurchase behavior, the frequency and amount of repurchase, and brand switching in each purchase instance (Bandyopadhyay & Martell, 2007). Attitudinal loyalty is an approach emphasizing the role of experience and emotional aspects in loyalty, reflecting customer actions, tied to their past buying limits with a specific brand or a group of brands potentially purchasable in the future based on past buying behavior (evanschitzky & Wunderlich, 2006). the authors believe that the composite method, considering both attitude and behavior, is the most robust and suitable approach for research as it captures the two most significant influences on user decisions (rujrutana & Yaowalak, 2011). service managers and market researchers posit a robust theoretical framework underpinning empirical inquiries into the nexus between customer satisfaction and loyalty. empirical studies affirm a pronounced and affirmative correlation between customer satisfaction and loyalty. they reveal that contented customers display a higher inclination toward loyalty compared to their less satisfied counterparts, thereby holding substantive implications for a company’s performance (reichheld & sasser, 1990). conversely, dissatisfaction often precipitates customer defection. such satisfaction positively correlates with customer loyalty, whereas discontentment tends to drive customer attrition. A satisfied customer is more likely to engage in repeat purchases and disseminate their experiences to five or six others (gronroos, 2000; Zairi, 2000). Furthermore, even slight dissatisfaction among customers might prompt them to discontinue business relations with an organization, notwithstanding the organization’s substantial efforts to satisfy them (Mohsan etal., 2011). As customer satisfaction escalates, so does the degree of loyalty. these above studies collectively conclude a significant and substantive correlation between customer satisfaction and loyalty, affirming that heightened levels of customer satisfaction engender heightened loyalty toward companies. however, there are mediating factors between satisfaction and loyalty (uslu & eren, 2020). Applying the satisfaction and loyalty of customers and their relationship in FDi attraction of a country or a province, it can be seen that foreign investors are customers, and the host countries or provinces are the providers. if foreign investors are satisfied with their investment in host countries, they will continue, or expand their investment so they are loyal customers. to build the conception of foreign investors’ satisfaction and loyalty and the factors affecting them, the author based on some theoretical frameworks about determinants of FDi such as Dunning’s eclectic theory (Dunning, 1979), theory of investment environment, theory of national competitive Advantage of industries (porter, 1985). Developed by Dunning in 1979, the eclectic theory is also called the oli model. According to this theory, there are three accommodating a wide range of operational advantages behind the rationale of engaging in FDi activities: (1) ownership advantages (o), (2) location advantages (l), (3) internalization advantages (i). ownership advantage can also be considered as a competitive advantage involving the advantages of technology, notable economies of scale, comparative advantage from the proprietorship of some intangible assets such as patents and brands as well as management skills over potential competitors. location advantage focuses more on the geographic advantages and other advantages including availability of raw materials, large market size, low cost of production process factors, and a favorable policy of host countries. internalization advantage may be seen as the interaction between the two above advantages. this is the case when a firm chooses between carrying out development internally and licensing the jurisdictions to means of enlargement to other firms. if the net benefits of internalizing cross-border intermediate product markets surpass that of exchanging through licensing or exporting the right to a foreign firm, there will be a higher chance of firms preferring to engage in foreign production itself. According to the theory of investment environment, the investment environment is the set of specific local factors that are shaping the opportunities and motivations for enterprises to invest effectively, create jobs, and expand exports… Based on opportunity costs, risks, and competitive barriers in investment, investors figure out opportunities and motivations to invest in a certain location. there are many different factors affecting the investment decisions of FDi investors, however, they can be classified into two 4 t. c. DAng etAl. types as follows: (1) hard infrastructure (economic infrastructure, seaports, quality of human resources), these are factors that need time and financial resources to improve; (2) soft infrastructure (government capacity, investment incentives, etc.) this is a group of factors related to the leadership philosophy of local managers. According to the theory of national competitive Advantage of industries, Micheal porter (1985) built a diamond-shaped framework that focuses on explaining why some industries in some countries are so much more developed and competitive compared to industries elsewhere on the planet. porter argues that any company’s ability to compete in the international arena is based mainly on an interrelated set of location advantages that certain industries in different nations possess, namely: Firm strategy, structure, and rivalry; Factor conditions; Demand conditions; and related and supporting industries. this theory sums up the location advantages that Dunning is referring to in his eclectic paradigm (also known as the oli framework). the Diamond Model could therefore be used when analyzing foreign markets for potential entry or when making FDi decisions. in the context of this study, we can consider this theory as local competitive advantages or local marketing theory. those theories explain why a foreign investor chooses a locality to carry out FDi. A foreign investor will look for favorable points in a locality before investing. if they meet all the requirements for FDi enterprises to operate effectively, they will invest. When investing effectively, they will be satisfied and decide whether to continue investing or not. so the factors affecting FDi investors making decisions to invest are also the factors impacting their satisfaction and loyalty. the satisfaction of foreign investors (the target clientele) concerning a specific location or locale (product, service) originates from the FDi enterprise’s perception of contentment or discontentment. this perception is rooted in the comparison between the perceived experiences and expectations during the implementation of an FDi project within a particular location or locale. it also pertains to their intention for prolonged engagement, business expansion, and the introduction of new enterprises. the primary objectives of FDi investors when approaching a specific locality encompass cost-effectiveness, adherence to timelines, project operational capabilities, revenue generation, and profitability. consequently, their contentment leads to the selection of long-term investments in locales that facilitate the most expedient, efficient, and cost-effective achievement of their objectives. if we consider FDi investors as the sought-after clientele of a region, their satisfaction entails their contentment with the investment services offered by the locale. this includes an assessment of the potential customer base or prospective market that can be accessed from the locality, as well as intrinsic factors such as the locality’s infrastructure, labor force, investment incentive policies, or fundamentally, the local investment and business environment (Dang & nguyen, 2019). A conducive investment and business environment are seen as ‘the linchpin’ that facilitates stable operations and growth for FDi enterprises. According to the World Bank, the ‘investment and business environment comprises distinct local elements that significantly influence the opportunities and impetus for efficient investment, expansion of production, and employment generation for the populace’ (the World Bank, 2004). the vietnam chamber of commerce and industry (vcci), with support from the united states Agency for international Development (usAiD) in vietnam, has utilized the provincial competitiveness index (pci) to measure and evaluate the quality of economic governance, the level of convenience and friendliness in the investment and business environment, and the administrative reform efforts of provincial and municipal authorities in vietnam. this initiative aims to foster the development of the private economic sector. According to vcci, a locality is deemed to have good quality governance or a favorable investment and business environment if it possesses the following characteristics: (1) low market entry costs; (2) easy access to and stable use of land; (3) a transparent business environment with publicly available business information; (4) low unofficial costs; (5) swift inspection, examination, and implementation of regulations and administrative procedures; (6) equitable competitive environment; (7) proactive provincial authorities demonstrating innovation in addressing business issues; (8) high-quality business development support services; (9) sound labor training policies; (10) fair and efficient dispute resolution procedures while maintaining public order and security. the investment business environment of a locality comprises both hard and soft infrastructure. these facets bear upon the opportunity costs, the risk, and the impediments to competition throughout the cogent Business & MAnAgeMent 5 investment trajectory. investors, based on an evaluation of these three dimensions, ascertain their investment decisions concerning a specific locale. Furthermore, t. h. nguyen et al. (2004) applied the theory of local marketing to scrutinize factors influencing investor satisfaction, including (1) infrastructure, (2) investment incentives, and (3) natural and social determinants. Building upon the foundation of prior research and theories, the research hypotheses are proposed in table 1 and the research model is shown in Figure 1. 3. Methodology and data 3.1. Methodology the study was conducted by combining qualitative and quantitative research methods. Qualitative research is conducted to determine the appropriate model, factors, and measurement variables for the study. Based on the above research theories, inheriting the scales of previous studies on FDi attraction, the author proposed a demo questionnaire and then used a group discussion method with 10 experts working in relevant units such as the Department of planning and investment, Department of industry, and trade, Department of Finance, tax Department, and Management Boards of economic and industrial zones in nghệ An province. the scale and variables formed in qualitative research will be the basis for building an official survey questionnaire. the following official scale and variables are shown in table 2. After the official variable encoding process, the study intends to employ a combination of descriptive analysis, correlation analysis, factor analysis, and structural equation Modeling (seM) methodologies to elucidate and derive inferences regarding interrelationships among variables. 3.2. Data the primary data were collected from FDi investors involved in surveys and FDi projects in nghệ An province through both online and offline questionnaires. the survey was conducted from December 2022 to April 2023. Before conducting the interview and survey, the authors received a waiver for human research ethics from vinh university’s research ethics committee because the research was not dangerous, and participants were completely voluntary. research data is completely confidential and is used for research purposes only. the questionnaire employed a five-point likert scale (strongly Disagree, Disagree, neutral, Agree, strongly Agree) to enable FDi investors to evaluate factors influencing their satisfaction and loyalty in nghe An province. the authors distributed 360 questionnaires both online through email for respondents and offline (directly interviewed) in their offices. After excluding responses that did not fully meet the requirements, only 314 valid responses were obtained. According to hair et al. (2009), this sample Table 1. Propose hypotheses. Hypotheses Content expectation H1a infrastructure’s impact on the satisfaction of FDi investors. + H1b infrastructure’s influence on the loyalty of FDi investors. + H2a Human labor’s impact on the satisfaction of FDi investors. + H2b Human labor’s impact on the loyalty of FDi investors. + H3a Policy impacts on the satisfaction of FDi investors. + H3b Policy impacts on the loyalty of FDi investors. + H4a Living and working environment’s influence on the satisfaction of FDi investors. + H4b Living and working environment’s effect on the loyalty of FDi investors. + H5a Local brand’s effect on the satisfaction of FDi investors. + H5b Local brand’s influence on the loyalty of FDi investors. + H6a Quality of public services’ impact on the satisfaction of FDi investors. + H6b Quality of public services’ effect on the loyalty of FDi investors. + H7a Competitiveness advantage of the industry invested in locally and its impact on the satisfaction of FDi investors. + H7b Competitiveness advantage of the industry invested in locally and its influence on the loyalty of FDi investors. + H8a input cost competitiveness impacts the satisfaction of FDi investors. − H8b input cost competitiveness impacts the loyalty of FDi investors. − H9 satisfaction has an impact on the loyalty of foreign investors. + Source: Proposed by the authors. 6 t. c. DAng etAl. size (314 observations) aligns appropriately with a research design employing factor analysis (minimum 220 which is determined by the formula: n = k j m Pj = ∑ 1, where k = 5 or 10 contingent upon survey resources, pj represents the observed variables within the scale, and m denotes the range of scales from 1 to m— considering a research framework comprising 10 scales and 44 observed variables, opting for k = 5, n = 5*44 = 220 the minimum threshold). 4. Research results 4.1. Reliability corrected item-total correlation greater than 0.3 and a cronbach’s Alpha coefficient exceeding 0.6 is essential to ensure the reliability of the scale (nunnally & Bernstein, 1994). in this study, after eliminating several indicators that did not meet reliability criteria (huM5, cos4, sAt5), all remaining observed variables exhibited a corrected item-total correlation greater than 0.3. Additionally, the cronbach’s Alpha coefficients for all scales surpassed 0.6 in table 3, ensuring the reliability of the scale. 4.2. EFA Bryant and Yarnold (1995) define factor rotation as a process where observed variables are rotated along axes to yield a simpler factor structure. simplicity in structure implies that the observed variables are rotated to a point where each variable loads heavily on one factor and loads very weakly on the remaining factors. A high loading coefficient (strong loading) on one factor for an observed variable indicates that the variable effectively reflects the characteristics of that factor, while a low loading coefficient (weak loading) on other factors suggests a minimal relationship between the observed variable and those factors. Following the initial factor rotation, the author proceeded to remove the variables ser6 and con4 due to their loading coefficients being less than 0.55, subsequently, a second-factor rotation was conducted. the result of the second run is in table 4. Figure 1. Research model. cogent Business & MAnAgeMent 7 Table 2. scale of research. Code Content sources infrastructure (Con) Con1 Convenient transportation infrastructure for production and business t. D. nguyen et al. (2005), H. P. Dinh and Ha (2011), and P. H. Dinh (2011) Con 2 electrical system to meet production and business requirements Con 3 the water supply and drainage system meets the technical standards for production and business Con 4 Convenient communication infrastructure (telephone, internet, etc.) Con 5 the financial banking system is developed, meeting the requirements for business activities Con 6 Business premises are available and stable Human resources (HuM) HuM1 the abundant source of unskilled labor t. D. nguyen et al. (2005), Dunning, (1997), and Kotler et al. (2002) HuM2 Highly disciplined labor HuM3 easily recruit highly skilled management personnel in the locality HuM4 Labor has a good ability to absorb and apply technology HuM5 Local training institutions are capable of meeting the human resource needs of investors HuM6 Labors’ foreign language skills meet job requirements Policy (PoL) PoL1 the locality has attractive investment incentives t. D. nguyen et al. (2005), Romer (1986), Malesky et al. (2015), and Ha et al. (2015) PoL2 the locality has a long-term strategy and orientation in attracting investment PoL3 the locality has active government leaders in supporting investors PoL4 the locality has a transparent and synchronous investment policy Living and working environment (enV) enV1 the locality has a school system that meets the needs of workers t. D. nguyen et al. (2005) and a. n. nguyen and nguyen (2007) enV2 the locality has a health system that can meet the healthcare needs of workers enV3 the locality with a ‘green’ living environment enV4 the locality has friendly people, creating favorable conditions for production and business activities enV5 the locality has a reasonable cost of living Local brand (LoC) LoC1 the locality has an ‘impressive’ brand t. t. M. nguyen (2016), a. n. nguyen, and nguyen (2007)LoC2 the locality is the destination of many investors LoC3 Many investors have been successful here LoC4 investors implement projects because they want to contribute to the local economic development Public service quality (seR) seR1 simple and fast administrative procedures Romer (1986) and gronroos (1984)seR2 public administrative officers have good qualifications, skills, and service attitude seR3 Local state agencies are ready to support investors when needed, and investors’ questions are always answered satisfactorily seR4 investment promotion, trade and tourism agency (iPa) provides good support for investors seR5 investors can easily access local information and documents seR6 the coordination among state management agencies is harmonious and fast investment industry advantage (aDV) aDV1 the main materials for production and trading are available and abundant Ha et al. (2015) aDV 2 Local is the main consumption market aDV 3 near business parties (main distributors or suppliers) aDV 4 the local support industry thrives Competitive input cost (Cos) Cos1 the locality has a great advantage in terms of labor costs Dunning (1997), a. n. nguyen and nguyen (2007), t. D. nguyen et al. (2005), and Ha et al. (2015) Cos2 Rental costs are reasonable Cos3 the cost of electricity, water, transportation, and telecommunications are reasonable Cos4 Low input costs for production and business satisfaction (sat) sat1 i am very satisfied to invest in the locality t. t. M. nguyen (2016), Kotler and Keller (2006), and H. P. Dinh and Ha (2011) sat 2 the locality met our expectations sat 3 i will continue to invest in the local long-term sat 4 i think our revenue has/will grow as expected sat 5 i think our profit has/will be as expected Loyalty (LoY) LoY1 i always think of investing in the locality whenever there is a need Jones and sasser (1995) and P. H. Dinh (2011)LoY2 i will re-invest in the local LoY3 i will recommend the locality to other investors Source: Complied from the authors. 14 t. c. DAng etAl. friendly atmosphere and facilitation of production and business activities will further attract foreign investors. Foreign investors need to be provided with the best living environment to confidently conduct production and business activities in the locality. 6.5. Leverage the locality’s advantages Develop a system of supporting industries and leverage available local resources. With a population of over 3.5 million in nghệ An province and its position in the north central coast region, this constitutes a significant market for foreign investors. establish regional linkages, and connect sectors within the region and nationwide in terms of product systems, facilitating foreign investors in production and business activities. 6.6. Enhance the loyalty of investors to encourage foreign investors to invest in nghe An province and consider returning or recommending others, it is essential to ensure competitive labor costs and reasonable input costs for local production factors such as electricity, water, transportation, or affordable rental expenses. implementing these coherent solutions will enhance the loyalty of foreign investors to nghệ An province. Ethics approval this study is approved to waive ethics from the research ethics committee of vinh university. Author contributions Responsibility authors Conception or design of the work thanh Cuong Dang, thi thao Banh Collecting, analyzing, and interpreting data thi Hang trinh, Van Hao tran, thi thu Cuc nguyen, thi thao Banh Drafting of the paper all authors Revising it critically for intellectual content thanh Cuong Dang, thi thao Banh, thi thu Cuc nguyen Final approval of the version to be published all authors agreement to be accountable for all aspects of the work all authors Disclosure statement no potential conflict of interest was reported by the author(s). About the authors Dr. Thanh Cuong Dang is the Dean of the Banking and Finance Department at vinh university. he received phD degree in Banking - Finance from national economic university, vietnam in 2012. he is interested in the field of corporate finance, financial management, and international finance. Dr. Thi Thao Banh is working in Banking and Finance Department at vinh university. she is interested in the field of financial economics, financial management, and public finance. Dr. Van Hao Tran is the lecturer of Business Administration Department of vinh university. he is interested in the field of supply chain management, financial management, and government policies. Dr. Thi Hang Trinh is working in Banking and Finance Department at vinh university. her major is corporate finance. she has more than 10 years of research experience in lecturing and researching in her major. Asocc. Prof. Thi Thu Cuc Nguyen is the vice president of vinh university. she has more than 20 years working here. she has 20 years of research experience in financial policies and financial economics. Funding no funding was received. cogent Business & MAnAgeMent 15 ORCID thanh cuong Dang http://orcid.org/0000-0001-6749-8729 thi thao Banh http://orcid.org/0000-0002-3896-3318 van hao tran http://orcid.org/0009-0000-6052-0911 thi hang trinh http://orcid.org/0000-0002-9137-3480 thi thu cuc nguyen http://orcid.org/0000-0001-5473-4657 Data availability statement Data for this work includes questionnaires and responses from respondents who are managers at FDi enterprises in nghe An province. We agree to make data and materials supporting the results or analyses presented in our paper available upon reasonable request via email of the first author: [email protected]. References Akinci, g., & crittle, J. (2008). Special economic zone: Performance, lessons learned, and implication for zone development (Foreign investment Advisory service (FiAs) occasional paper). World Bank group. Auka, D. o. (2012). service quality, satisfaction, perceived value and loyalty among customers in commercial banking in nakuru Municipality, Kenya. African Journal of Marketing Management, 4(5), 1–16. https://doi.org/10.5897/ AJMM12.033 Bandyopadhyay, s., & Martell, M. (2007). Does attitudinal loyalty influence behavioral loyalty? A theoretical and empirical study. Journal of Retailing and Consumer Services, 14(1), 35–44. https://doi.org/10.1016/j.jretconser.2006.03.002 Barro, r. J., & sala-i, M. X. (1997). technological diffusion, convergence, and growth. Journal of Economic Growth, 2(1), 1–26. https://doi.org/10.1023/A:1009746629269 Begg, r., Best, r., Dell’oro, l., & taylor, s. (2007). Minimum foot clearance during walking: strategies for the minimization of trip-related falls. Gait & Posture, 25(2), 191–198. https://doi.org/10.1016/j.gaitpost.2006.03.008 Bryant, F. B., & Yarnold, p. r. (1995). principal components analysis and confirmatory factor analysis. in l. g. grim & p. r. Yarnold (eds.), Reading and understanding multivariate statistics (pp. 99–136). American psychological Association. Buttle, F. A. (1998). Word of mouth: understanding and managing referral marketing. Journal of Strategic Marketing, 6(3), 241–254. https://doi.org/10.1080/096525498346658 Dang, t. c., Banh, t. t., trinh, t. h., hoang, t. v., & Doan, t. n. h. (2023). territorial marketing impacts on foreign direct investment attraction (empirical evidence in nghe An province, vietnam). Cogent Economics & Finance, 11(1), 2197367. https://doi.org/10.1080/23322039.2023.2197367 Dang, t. c., & nguyen, t. Y. (2019). Determinants of foreign direct investment in nghe An province, vietnam. International Review of Accounting, Banking and Finance, 11(4), 26–37. Dick, A. s., & Basu, K. (1994). customer loyalty: toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22(2), 99–113. https://doi.org/10.1177/0092070394222001 Dinh, h. p., & ha, t. M. (2011). Factors affecting the satisfaction of foreign investors in industrial parks quantitative model and policy suggestions. Journal of Economic Development, 254, 30–37. Dinh, p. h. (2011). Factors affecting investment attraction in industrial parks, Quantitative research methods and practical research in economics agricultural development. phuong Dong publishing. Dinh, p. h. (2012). Quantitative research methods and practical research in agrarian-economics. orient publishing house. Dunning, J. h. (1979). explaining changing patterns of production: in international defence of the eclectic theory. Oxford Bulletin of Economics and Statistics, 41, 269–295. https://doi.org/10.1111/j.1468-0084.1979.mp41004003.x Dunning, J. h. (1997). Alliance capitalism and global business. routledge. evanschitzky, h., & Wunderlich, M. (2006). An examination of moderator effects in the four-stage loyalty model. Journal of Service Research, 8(4), 330–345. https://doi.org/10.1177/1094670506286325 gilbert, g. r., & veloutsou, c. (2006). A cross‐industry comparison of customer satisfaction. Journal of Services Marketing, 20(5), 298–308. https://doi.org/10.1108/08876040610679918 gronroos, c. (1984). A service quality model and its marketing implications. European Journal of Marketing, 18, 36–44. gronroos, c. (2000). Service management and marketing: A customer relationship management approach. John Wiley and sons. https://www.researchgate.net/publication/215915793_service_Management_and_Marketing_A_ customer_relationship_Management_Approach ha, n. K. g., le, Q. h., ha, K. h., & huynh, D. t. A. (2015). study the factors affecting to investment attraction in ca Mau province. Ho Chi Minh City Open University, Science Journal, 5 (44), 85–97. hair, J. F., Jr., William, c. B., Barry, J. B., & rolph, e. A. (2009). Multivariate data analysis. pearson. hansemark, o., & Albinsson, M. (2004). customer satisfaction and retention: the experiences of individual employees. Managing Service Quality, 14, 40–57. https://doi.org/10.1108/09604520410513668 hoang, t. M., & le, D. M. t. (2021). Factors influencing the satisfaction of investors in Ben tre province, Kinh tế và quản trị kinh doanh. Ho Chi Minh City Open University Journal of Science, 17(4), 51–63. 16 t. c. DAng etAl. hu, l. t., & Bentler, p. M. (1999). cutoff criteria for fit indexes in covariance structure analysis: conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55. https://doi. org/10.1080/10705519909540118 Jacoby, J., & chestnut, r. W. (1978). Brand loyalty measurement and management. John Wiley and sons. Jones, t. o., & sasser, W. e. (1995). Why satisfied customers defect. Harvard Business Review, 73, 88–99. Kotler, p., hamlin, M. A., rein, i., & haider, D. h. (2002). Marketing Asian places: Attracting investment, industry, and tourism to cities, states and nations. John Wiley & sons. Kotler, p., & Keller, K. l. (2006). Marketing management. pearson prentice hall. le, h. h. B. (2015). Determinant of the factors affecting foreign direct investment (FDi) flow to thanh hoa province in vietnam. Procedia - Social and Behavioral Sciences, 172, 26–33. le, v. s. M., Dalasouk, K., nguyen, t. t., hoang, t. h. t., & tran, D. K. (2023). Factors affecting investor satisfaction in the southeast economic zone of nghe An province. Asian Economic and Financial Review, 13(4), 251–268. https:// doi.org/10.55493/5002.v13i4.4765 lee, h., lee, Y., & Yoo, D. (2000). the determinants of perceived service quality and its relationship with satisfaction. Journal of Services Marketing, 14(3), 217–231. https://doi.org/10.1108/08876040010327220 Malesky, e., Jensen, n. M., & Weymouth, s. (2009). unbundling the relationship between authoritarian legislatures and political risk. British Journal of Political Science, 44(3), 655–684. https://doi.org/10.1017/s0007123412000774 Malesky, e., Mcculloch, n., & nhat, n. D. (2015). the impact of governance and transparency on firm investment in vietnam. Econ Transit, 23, 677–715. https://doi.org/10.1111/ecot.12068 Mohsan, F., nawaz, M. M., Khan, M. s., shaukat, M. Z. & Aslam, n. (2011). impact of customer satisfaction on customer loyalty and intentions to switch: evidence from banking sector of pakistan. International Journal of Business and Social Science, 2, 16. nguyen, A. n., & nguyen, t. (2007). Foreign direct investment in Vietnam: An overview and analysis the determinants of spatial distribution across provinces (July 10, 2007). https://ssrn.com/abstract=999550 nguyen, M. t. (2010). Factors affecting the attraction of foreign direct investment into a locality of vietnam. Science and Technology Journal - Danang University, 40, 270– 276. nguyen, t. D., nguyen, c. t. B., nguyen, t. t. M., & pham, l. X. (2005). Investigate and assess the current situation of investment environment in Tien Giang province and propose solutions to mobilize social resources for development investment [paper presentation]. provincial scientific research project -Department of science and technology of tien giang province, tien giang, vietnam. nguyen, t. h., nguyen, h. v., & Meyer, K. e. (2004). FDi in vietnam. in saul estrin & Klaus e. Meyer (eds.), Investment strategies in emerging economies nvestment strategies in emerging economies (chapter 9, pp. 243–268). edward elgar publishing. nguyen, t. t. M. (2016). Foreign direct investment with sustainable development in the Red River Delta region [phD dissertation]. national economics university. nunnally, J. c., & Bernstein, i. h. (1994). Psychometric theory (3rd ed.). Mcgraw-hill. parasuraman, A., Berry, l. l., & Zeithaml, v. A. (1985). A conceptual model of service quality and its implications for future research. Journal of Marketing, 49(4), 41–50. https://doi.org/10.2307/1251430 parasuraman, A., Zeithaml, v. A., & Berry, l. l. (1988). servQuAl: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing, 64, 12–40. porter, M. e. (1985). Competitive advantage. Creating and sustaining superior performance. Free press. reichheld, F. F., & sasser, e. (1990). Zero defections: Quality comes to services. Harvard Business Review, 68(5), 105–111. romer, p. M. (1986). Dynamic competitive equilibria with externalities, increasing returns and unbounded growth [phD dissertation]. university of chicago. rujrutana, M., & Yaowalak, p. (2011). A model of customer loyalty and corporate social responsibility. Journal of Service Marketing, 25(2), 122–133. seiders, K., voss, g., grewal, D., & godfrey, A. (2005). Do satisfied customers buy more? examining moderating influences in a retailing context. Journal of Marketing, 69(4), 26–43. https://doi.org/10.1509/jmkg.2005.69.4.26 shanka, M. s. (2012). Bank service quality, customer satisfaction and loyalty in ethiopian banking sector. Journal of Business Administration and Management Sciences Research, 1(1), 001–009. siddiqi, K. o. (2011). interrelations between service quality attributes, customer satisfaction and customer loyalty in the retail banking sector in Bangladesh. International Journal of Business and Management, 6(3), 12-36. https://doi. org/10.5539/ijbm.v6n3p12 the World Bank. (2004). A better investment climate for everyone. the international Bank for reconstruction and Development/the World Bank. uslu, A., & eren, r. (2020). critical review of service quality scales with a focus on customer satisfaction and loyalty in restaurants. DETUROPE - The Central European Journal of Tourism and Regional Development, 12(1), 64–84. https:// doi.org/10.32725/det.2020.004 Zairi, M. (2000). Managing customer dissatisfaction through effective complaint management systems. The TQM Magazine, 12(5), 331–337. https://doi.org/10.1108/09544780010341932