Determinants of Cross-border Economic Zone Development: Empirical Evidence from Lao Cai, Vietnam

Cross-border economic zones (CBEZs) play a strategic role in fostering international trade, attracting investment, and promoting socio-economic integration in border regions. In Vietnam, the Lao Cai Border-Gate Economic Zone (BGEZ) plays a vital role as part of the Kunming–Lao Cai–Hanoi–Hai Phong economic corridor, directly connecting Vietnam with China's Yunnan Province. This study investigates the determinants of the Lao Cai Border-Gate Economic Zone (BGEZ), a critical gateway between Vietnam and China. Based on an extensive literature review, seven potential factors were hypothesised to positively influence BGEZ development: infrastructure, management and preferential policies, international relations and regional cooperation, competitiveness and innovation, global economic environment, human resources, and socio-environmental conditions. A survey of 285 managers and enterprises in Lao Cai was conducted, and quantitative techniques, including Cronbach's Alpha, Exploratory Factor Analysis (EFA), and multiple regression, were applied. Results reveal that six out of seven factors significantly contribute to BGEZ development, with human resources emerging as the strongest determinant, followed by socio-environmental conditions and international cooperation. The empirical findings provide important insights into the development dynamics of the Lao Cai Border-Gate Economic Zone (BGEZ). The regression model demonstrates a strong explanatory power, with six out of seven hypotheses confirmed at a high level of statistical significance (p < 0.01). Other factors, including governance and policy incentives (β = 0.230), infrastructure (β = 0.164), and competitiveness and innovation (β = 0.143), also contribute positively, though to a lesser degree. The global economic environment was excluded from the regression model due to multicollinearity. The findings contribute to the theoretical understanding of border economic zone development and provide practical implications for policy-making in emerging economies.