Capital for sustainable economic growth: The case from Dong Nai province in Viet Nam, 2022

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM

BANKING UNIVERSITY OF HO CHI MINH CITY

DO THI LAN DAI

CAPITAL FOR SUSTAINABLE ECONOMIC GROWTH:

THE CASE FROM DONG NAI PROVINCE IN VIETNAM

DISSERTATION IN FINANCE - BANKING

HCMC, 12/2022

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM

BANKING UNIVERSITY OF HO CHI MINH CITY

DO THI LAN DAI

CAPITAL FOR SUSTAINABLE ECONOMIC GROWTH:

THE CASE FROM DONG NAI PROVINCE IN VIETNAM

DISSERTATION IN FINANCE - BANKING

Major: Finance - Banking

CODE: 9 34 02 01

Advisor: Assoc. Prof. Dr. Hoang Thi Thanh Hang

HCMC – 12/2022

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COMMITMENT

The author guarantees that the dissertation “Capital for sustainable economic

growth: the case from Dong Nai province in Vietnam” is the research.

Except for the references cited in this dissertation. The author guarantees that

the whole or a small part of this dissertation has never been published or used to

obtain a degree elsewhere.

No other people’s products/studies have been used in this dissertation that has

not been appropriately cited.

This dissertation has never been submitted to receive any degree at any

university or other training institution.

HCMC, December 16, 2022

D

Do Thi Lan Dai

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ACKNOWLEDGEMENT

The author would like to sincerely thank the Banking University of Ho Chi

Minh City administrators and teachers, especially the teachers directly teaching K22

Ph.D. students who have enthusiastically taught, passed on experience, and supported

the author while studying at the Banking University of Ho Chi Minh City. The author

would like to express his gratitude and respect to the science instructor, Assoc. Prof.

Dr. Hoang Thi Thanh Hang enthusiastically supported, encouraged, and instructed the

author to implement and complete this dissertation.

The author also expressed gratitude to the Board of Directors and officers at

enterprises in Dong Nai province, managers who participated in the author’s

interviews and surveys. The author also thanked family and friends for their help,

creating favorable conditions for the author to complete the dissertation.

Although the author has made great efforts, the dissertation cannot avoid its

shortcomings. I hope to receive comments from my teachers and friends.

Sincerely!

HCMC, December 16, 2022

Author

Do Thi Lan Dai

iii

ABSTRACT

In recent years, the mobilization and use of investment capital, especially

foreign investment capital, have significantly affected the country’s speed and quality

of economic growth and each locality. Besides, Dong Nai has favorable conditions to

develop the marine economy with the Southeast provinces. These economic,

demographic, and geographic factors help facilitate Dong Nai’s promotion of

economic development. However, Dong Nai still faces significant challenges in

developing specific sectors and products with comparative advantages.

Attracting and effectively using investment capital is always a complex

problem for locations still weak in infrastructure, financial sophistication, attractive

policies, the efficiency of using capital sources, and many inadequacies when

implementing investment projects. Therefore, this study aims to identify factors

affecting the investment capital attraction for sustainable economic growth.

The author tested Cronbach’s Alpha, confirmatory factor analysis (CFA), and

structural equation model (SEM). Based on the research results, the author proposed

policy implications for attracting investment capital for sustainable economic growth

in Dong Nai province. The study surveyed 1.000 managers related to enterprises with

investment capital in Dong Nai province, but 939 samples were processed and

answered 39 questions. The data was collected from June 2020 to November 2020.

Based on the things mentioned above, eight factors affect the investment

capital attraction for sustainable economic growth in Dong Nai province. Technology

(Te); Working and living environment (Wle); infrastructure (In); investment costs

(Ic); human resources (Hr); investment policies (Ip); regional connectivity (Rc); and

public service quality (Psq). Besides. The results are also scientific and important for

Dong Nai province researchers and policymakers to apply research results to improve

investment capital attraction based on high and low standardized coefficients.

Finally, the author proposed policy implications for attracting investment

capital to improve Dong Nai province's sustainable economic growth: technology,

Working and living environment, infrastructure, investment costs, human resources,

investment policies, regional connectivity, and public service quality.

Keywords: Capital, sustainable, economic, growth, Dong Nai, Vietnam.

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TÓM TẮT LUẬN ÁN

Trong những năm gần đây, việc huy động và sử dụng vốn đầu tư, nhất là vốn

đầu tư nước ngoài đã ảnh hưởng không nhỏ đến tốc độ và chất lượng tăng trưởng kinh

tế của cả nước và của từng địa phương. Bên cạnh đó, Đồng Nai có điều kiện thuận lợi

để phát triển kinh tế với các tỉnh Đông Nam Bộ. Các yếu tố kinh tế, nhân khẩu học và

địa lý này giúp tạo điều kiện cho Đồng Nai thúc đẩy phát triển kinh tế. Tuy nhiên,

Đồng Nai vẫn phải đối mặt với những thách thức lớn trong việc phát triển các ngành,

sản phẩm cụ thể có lợi thế so sánh.

Thu hút và sử dụng hiệu quả vốn đầu tư luôn là một bài toán phức tạp đối với

các địa phương còn yếu kém về cơ sở hạ tầng, khó khăn về tài chính, chính sách hấp

dẫn, hiệu quả sử dụng các nguồn vốn, còn nhiều bất cập khi triển khai các dự án đầu

tư. Do đó, nghiên cứu này nhằm xác định các nhân tố ảnh hưởng đến việc thu hút vốn

đầu tư để tăng trưởng kinh tế bền vững.

Tác giả đã kiểm định độ tin cậy thông qua hệ số Cronbach’s Alpha, phân tích

nhân tố khẳng định (CFA), và mô hình cấu trúc tuyến tính (SEM). Trên cơ sở kết quả

nghiên cứu, tác giả đề xuất các hàm ý chính sách thu hút vốn đầu tư để tăng trưởng

kinh tế bền vững trên địa bàn tỉnh Đồng Nai. Nghiên cứu đã khảo sát 1.000 cán bộ

quản lý liên quan đến doanh nghiệp có vốn đầu tư trên địa bàn tỉnh Đồng Nai, nhưng

có 939 mẫu được xử lý và trả lời 39 câu hỏi. Dữ liệu được thu thập từ 6-11/2020.

Dựa những dữ liệu trên, kết quả có 8 yếu tố ảnh hưởng đến việc thu hút vốn

đầu tư để tăng trưởng kinh tế bền vững của tỉnh Đồng Nai. Công nghệ (Te); Môi

trường sống và làm việc (Wle); cơ sở hạ tầng (In); chi phí đầu tư (Ic); nguồn nhân lực

(Hr); chính sách đầu tư (Ip); kết nối khu vực (Rc); và chất lượng dịch vụ công (Psq).

Kết quả cũng mang tính khoa học và quan trọng đối với các nhà nghiên cứu và hoạch

định chính sách của tỉnh Đồng Nai trong việc ứng dụng kết quả nghiên cứu để nâng

cao khả năng thu hút vốn đầu tư dựa trên các hệ số chuẩn hóa cao và thấp.

Cuối cùng, tác giả đề xuất các hàm ý chính sách thu hút vốn đầu tư nhằm nâng

cao tốc độ tăng trưởng kinh tế bền vững của tỉnh Đồng Nai: công nghệ, Môi trường

sống và làm việc, cơ sở hạ tầng, chi phí đầu tư, nguồn nhân lực, chính sách đầu tư, kết

nối vùng và chất lượng dịch vụ công.

Từ khóa: Vốn, bền vững, kinh tế, tăng trưởng, Đồng Nai, Việt Nam.

v

CONTENTS

Page

Commitment

Acknowledgment

Summary of dissertation

List of acronyms

List of tables

List of figures

CHAPTER 1. INTRODUCTION ....................................................................1

1.1 Reason for study .............................................................................................1

1.2 Objectives of the study ..................................................................................4

1.2.1 General objective....................................................................................4

1.2.2 Specific objective ...................................................................................4

1.3 Research questions .........................................................................................4

1.4 Scope and delimitation of the study .............................................................4

1.4.1 Scope and objective of the study ..........................................................4

1.4.2 The time of study....................................................................................5

1.5 Research methods...........................................................................................5

1.6 Scientific and practical significance of research.........................................6

1.6.1 The scientific significance of research .....................................................6

1.6.2 The practical significance of research ......................................................7

1.7 Organization of the study ..............................................................................7

CHAPTER 2: LITERATURE REVIEW AND RESEARCH MODEL .............8

2.1 Theoretical framework......................................................................................8

2.1.1 Economic growth......................................................................................8

2.1.2 Sustainable economic growth .................................................................13

2.1.3 Capital and investment attraction for sustainable economic growth......17

2.1.4 The relationship between investment attraction .....................................20

2.1.5 Factors affecting investment attraction...................................................23

2.2 Review of related studies.............................................................................31

2.2.1 Review of related studies in other countries...........................................31

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2.2.2 Review of related study in Vietnam .......................................................37

2.3 The experiences in investment capital attracting............................................42

2.3.1 Asian countries .....................................................................................42

2.3.2 Vietnam .................................................................................................47

2.3.3 The lessons in investment capital attraction for Dong Nai ............ 51

2.4 The gap in the studies.....................................................................................53

2.5 The scientific basis for building a research model .........................................54

2.5.1 The scientific basis for building a research model .................................54

2.5.2 Research model and research hypothesis...........................................55

Summary of chapter 2 .................................................................................. 59

CHAPTER 3. RESEARCH METHODOLOGY............................................. 60

3.1 Research procedure.........................................................................................60

3.2 Qualitative research ........................................................................................63

3.2.1 Qualitative research results....................................................................63

3.2.2 Group discussion results........................................................................76

3.2.3 Questionnaire design...............................................................................76

3.2.4 The results of the scale test through preliminary quantification ............77

3.2.5 Exploratory Factor Analysis (EFA)........................................................83

3.3 Quantitative research ......................................................................................86

3.3.1 Sample size and sampling techniques.....................................................86

3.3.2 Data collection instrument......................................................................87

3.3.3 Data analysis techniques.........................................................................87

Summary of chapter 3 .................................................................................. 91

CHAPTER 4. RESEARCH RESULTS.......................................................... 92

4.1 Overview of Dong Nai province....................................................................92

4.1.1 Geographical position.............................................................................92

4.1.2 Topography.............................................................................................92

4.1.3 Land ........................................................................................................93

4.1.4 Climate....................................................................................................94

4.1.5 Population ...............................................................................................94

4.1.6 Infrastructure..........................................................................................94

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4.1.7 Traffic .....................................................................................................95

4.1.8 Resources................................................................................................95

4.1.9 Tourism...................................................................................................96

4.1.10 Status of attracting investment capital from 2019 to 2020...................96

4.2 Research results...............................................................................................99

4.2.1 Descriptive statistics of the research sample ..........................................99

4.2.2 Cronbach alpha test of reliability..........................................................102

4.2.3 Exploratory factor analysis (EFA) and Confirmatory factor analysis..109

4.2.4 Testing of structural equation modeling (SEM)...................................113

4.2.5 Testing model by Bootstrap (N = 5.000) ..............................................118

4.2.6 Testing analysis of variance (ANOVA) ...............................................119

4.2.7 T-Test the means of two groups (T-test) ..............................................121

Summary of chapter 4 ................................................................................ 130

CHAPTER 5: CONCLUSIONS AND POLICY IMPLICATIONS............... 131

5.1 Conclusions...................................................................................................131

5.2 Policy implications .......................................................................................134

5.2.1 Technology ...........................................................................................134

5.2.2 Regional connectivity ...........................................................................136

5.2.3 Public service quality............................................................................138

5.2.4 Investment costs....................................................................................140

5.2.5 Human resources...................................................................................142

5.2.6 Investment policies...............................................................................144

5.2.7 Infrastructure.........................................................................................147

5.2.8 Working and living environment..........................................................149

5.3 Limitations and suggestions for further research .........................................152

5.3.1 Limitations of the research ...................................................................152

5.3.2 Suggestions for further research ...........................................................152

Summary of chapter 5 ................................................................................ 152

REFERENCES ................................................................................................i

APPENDIX...........................................................................................................vii-xx

viii

LIST OF ACRONYMS

No. Code Contents

1 ANOVA Analysis of variance

2 CFA Confirmatory factor analysis

3 EFA Exploratory factor analysis

4 EU European Union

5 FDI Foreign direct investment

6 FL Factor loading

7 GDP Gross Domestic Product

8 GNI Gross National Income

9 GNP Gross National Product

10 HCMC Ho Chi Minh City

11 HR Human resources

12 IC Investment costs

13 IMF International Monetary Fund

14 IN Infrastructure

15 IP Investment policies

16 KMO Kaiser - Meyer – Olkin

17 MAN Management capacity

18 OECD

Organization for Economic Co-operation and

Development

19 PSQ Public service quality

20 RC Regional connectivity

21 SDM Spatial Durbin Model

22 SEM structural equation modeling

23 Sig. Significant

24 SPSS Statistic Package for Social Sciences

25 TE Technology

26 WLE Working and living environment

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LIST OF TABLES

Table 3.1: The results of the discussion of 30 managers.............................................65

Table 3.2: Qualitative research results of infrastructure (IN)......................................66

Table 3.3: Qualitative research results of investment policies (IP) .............................67

Table 3.4: Qualitative research results of working and living environment (WLE) ...68

Table 3.5: Qualitative research results of public service quality (PSQ)......................69

Table 3.6: Qualitative research results of regional connectivity (RC).........................70

Table 3.7: Qualitative research results of human resources (HR) ...............................71

Table 3.8: Qualitative research results of technology (TE) .........................................72

Table 3.9: Qualitative research results of investment costs (IC) .................................73

Table 3.10: Qualitative research results of investment capital attraction (ICA) .........74

Table 3.11: Qualitative research results of sustainable economic growth (SEG) .......75

Table 3.12: Cronbach’s Alpha for infrastructure (IN).................................................78

Table 3.13: Cronbach’s Alpha for investment policies (IP) ........................................79

Table 3.14: Cronbach’s Alpha for working and living environment (WLE) ..............79

Table 3.15: Cronbach’s Alpha for public service quality (PSQ).................................80

Table 3.16: Cronbach’s Alpha for regional connectivity (RC)....................................80

Table 3.17: Cronbach’s Alpha for human resources (HR) ..........................................81

Table 3.18: Cronbach’s Alpha for technology (TE) ....................................................81

Table 3.19: Cronbach’s Alpha for investment costs (IC) ............................................82

Table 3.20: Cronbach’s Alpha for investment capital attraction (ICA).......................82

Table 3.21: Cronbach’s Alpha for sustainable economic growth (SEG).....................83

Table 3.22: KMO and Bartlett's Test ...........................................................................83

Table 3.23: Total Variance Explained .........................................................................84

Table 3.24: Principal components................................................................................85

Table 4.1: Sample structure by Gender........................................................................99

Table 4.2: Sample structure by Marital status..............................................................99

Table 4.3: Sample structure by Age.............................................................................99

Table 4.4: Sample structure by Type of enterprise ....................................................100

Table 4.5: Sample structure by Business operation time ...........................................100

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Table 4.6: Sample structure by type of business operation .......................................100

Table 4.7: Descriptive Statistics for factors...............................................................101

Table 4.8: Cronbach’s Alpha for Infrastructure (IN).................................................102

Table 4.9: Cronbach’s Alpha for Investment policies (IP)........................................103

Table 4.10: Cronbach’s Alpha for Working and living environment (WLE) ...........104

Table 4.11: Cronbach’s Alpha for Public service quality (PSQ)...............................104

Table 4.12: Cronbach’s Alpha for Regional connectivity (RC) ................................105

Table 4.13: Cronbach’s Alpha for Human resources (HR) .......................................106

Table 4.14: Cronbach’s Alpha for Technology (TE).................................................106

Table 4.15: Cronbach’s Alpha for Investment costs (IC)..........................................107

Table 4.16: Cronbach’s Alpha for Investment capital attraction (ICA) ....................108

Table 4.17: Cronbach’s Alpha for Sustainable economic growth (SEG)..................109

Table 4.18: KMO and Bartlett's Test .........................................................................110

Table 4.19: Total Variance Explained .......................................................................110

Table 4.20: Pattern Matrix .........................................................................................111

Table 4.21: CFA test results on all items...................................................................113

Bảng 4.22: SEM model tested such as results ...........................................................115

Table 4.23: The results are estimated using Bootstrap with N = 5.000.....................118

Bảng 4.24: Analysis of variance about the age..........................................................119

Bảng 4.25: Analysis of variance about the kind of enterprise ...................................120

Bảng 4.26: Analysis of variance about the business operation time..........................120

Bảng 4.27: Analysis of variance about the kind of business operation .....................121

Table 4.28: T-Test the means of two groups about gender........................................121

Table 4.29: T-Test the means of two groups about marital status.............................122

Table 4.30: The results of testing research hypotheses..............................................123

Table 5.2: The results of priorities proposed policy implications .............................133

Table 5.3: The result of mean and standard deviation for technology.......................134

Table 5.4: The result of mean and standard deviation for regional connectivity ......136

Table 5.5: The result of mean and standard deviation for public service quality......138

Table 5.6: The result of mean and standard deviation for investment costs (IC)......140

Table 5.7: The result of mean and standard deviation for human resources .............142

xi

Table 5.8: The result of mean and standard deviation for investment policies .........144

Table 5.9: The result of mean and standard deviation for infrastructure...................147

Table 5.10: The result of mean and standard deviation for working.........................149

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LIST OF FIGURES

Figure 3.1: Research procedure ...................................................................................60

Figure 4.1: Confirmatory factor analysis (CFA) for all variable ...............................112

Figure 4.2: Model for factors affecting investment capital attraction .......................114

1

CHAPTER 1. INTRODUCTION

1.1 Reason for study

In recent years, the mobilization and use of investment capital, especially

foreign investment capital, have significantly affected the speed and quality of

economic growth in Vietnam and within each locality. Attracting and effectively using

investment capital is always a complex problem for locations that are still weak in

infrastructure, financial sophistication, investment attraction policies, efficient use of

capital sources, and other inadequacies when implementing investment projects. The

attraction of investment capital should increase labor productivity, create jobs, raise

workers' income, and transfer foreign technology advancements (Syarif and Umu,

2020). Long-term economic growth and improvement of its citizens’ living standards

should be among the top goals of any government. Sustainable economic growth in the

long term depends not only on scientific and technological progress but also on the

interaction between countries as the world economy has become increasingly

interdependent. This interaction is shown in the exchange of goods traded between

nations and the capital flowing from one country to another; in other words, capital

investment abroad.

According to Snieskaa and Tykiene (2019), sustainable economic growth is one

of the core issues of economic development theory. Sustainable economic growth and

development are the top targets of all countries globally, the primary measure of

progress for each stage. The overall goal of Vietnam's 2020 - 2025 socio-economic

development plan is sustainable economic growth, achieving an essential change in

efficiency and sustainability. Development, soon bringing Vietnam out of

underdevelopment. Significantly improve the cultural and spiritual life of the people.

To step up industrialization, modernization, and development of the knowledge

economy, creating a foundation for our country to become a modern-oriented

industrial country by 2030. Vietnam continues to maintain political stability and social

security. Besides, Vietnam continues healthy guard independence, sovereignty,

territorial integrity, and national security, enhancing its regional position.

One of the country’s most significant localities is Dong Nai province in the

Southeast region of Vietnam. Dong Nai has the second-largest population in the South

of Vietnam, after Ho Chi Minh City. Ho Chi Minh City has the second largest area in