After national reunification in 1975, Vietnam launched major economic reforms to rebuild its economy and prioritized education as a cornerstone of development. However, Vietnam s higher education system faces persistent challenges, including low enrollment, uneven quality, and skill mismatches between graduates and labor market needs. To address these issues, the Ministry of Education and Training (MOET) set ambitious targets for faculty qualifications: by 2030, non-doctoral institutions must employ at least 30% PhD-holding faculty, while doctoral institutions must reach 50%. Meeting these standards remains difficult, particularly for universities in rural areas. This study fills in a critical gap in empirical research by examining institutional factors, focusing on urbanization level, that predict the proportion of PhD-holding faculty in Vietnamese universities. Specifically, this study uses data from 202 institutions and official urbanization classifications to explore two questions: (a) How does urbanization level influence faculty qualifications? and (b) Does this effect vary by institutional characteristics? Results revealed that universities in low urbanization areas had a lower proportion of PhD-qualified faculty compared to those in higher urbanized regions. Doctoral universities had a higher percentage of PhD-holding faculty, compared to non-doctoral institutions. Urbanization had a greater effect on public institutions than private ones. Additionally, enrollment exhibited a nonlinear relationship with faculty qualifications, indicating complex dynamics between institutional size and academic staffing. These findings highlight systemic challenges in achieving national targets for doctoral faculty ratios by 2030, underscoring the need for targeted policies and interventions to support local universities. The study contributes to the current limited literature on the relationship between spatial disparities and quality of faculty within a developing country context.