Frontier Markets, Marginal Flows: Vietnamese Private Outward Investment in Africa and South Asia, 2015–2025

Abstract

Vietnam’s outward foreign direct investment (OFDI) is expanding and diversifying geographically, yet flows to Africa and South Asia remain marginal despite their prominence in policy discourse. This study examines the gap between investment potential and Vietnamese private-sector OFDI in four frontier markets: South Africa, Egypt, India, and Bangladesh. Drawing on secondary data from Vietnam’s Foreign Investment Agency, UNCTAD, the International Trade Centre, and the World Bank for 2015–2025, the study employs a descriptive, comparative design combining share analysis, compound growth rates, concentration measures, min–max normalized composite scoring, and a two-dimensional potential–performance matrix. The findings reveal substantial geographic concentration: three destinations account for approximately half of cumulative registered Vietnamese OFDI capital, whereas the four focal markets collectively account for well below 1%, despite representing more than 1.7 billion consumers. All four markets score substantially higher on the composite attractiveness index than Vietnam’s traditional investment destinations, placing them in the matrix’s high-potential, negligible-presence quadrant. This mismatch is associated with deficiencies in home-country institutional support, including gaps in trade agreements, investment guarantees, market intelligence infrastructure, and financing mechanisms tailored to small and medium-sized private enterprises entering distant frontier markets. The findings suggest that home-country support constraints, rather than weak host-country market fundamentals, are central to understanding Vietnam’s limited private investment in these regions. Accordingly, the study proposes a policy sequence that prioritizes information provision and risk-transfer instruments before capital incentives. By integrating international business, development economics, and economic diplomacy perspectives, the analysis provides a comparative diagnosis of underexplored investment opportunities and identifies institutional priorities for facilitating Vietnamese private-sector OFDI.