Pham Hoai Nam, Do Thi Thuy Phuong 2020, “The Situation of Mobilizing Investment Capital Sources for Socio-economic Infrastructure Development in Thai Nguyen Province, Vietnam” Internati
Trang 1UNIVERSITY OF ECONOMICS AND BUSINESS ADMINISTRATION
PHAM HOAI NAM
MOBILIZING INVESTMENT CAPITAL TO DEVELOP SOCIO-ECONOMIC INFRASTRUCTURE IN THAI NGUYEN
Trang 2THE THESIS IS COMPLETED AT UNIVERSITY OF ECONOMICS AND BUSINESS
ADMINISTRATION
Supervisors:
1 Assoc.Prof.Dr Tran Dinh Tuan
2 Assoc.Prof.Dr Do Thi Thuy Phuong
Reviewer 1:
Reviewer 2:
Reviewer 3:
The thesis will be defended at the Dissertation Council of University of
Economics and Business Adminstration At: ……date month year 2022
The thesis can be found at:
- National Library of Vietnam
- TNU Digital Center - Thai Nguyen University
- Library at Thai Nguyen University of Economics and Business
Administration
Trang 3DOCUMENTS RELATED TO THE DOCTORAL
DISSERTATION
1 Pham Hoai Nam (2018), “Public-private partnership in infrastructure sector through case analysis of Korea and Chile”,
Review of Finance, Term 1 - April 2018 (678), Pages 91- 93
2 Pham Hoai Nam (2018), “Local government bonds, capital mobilization channel for investment and development of
infrastructure in Thai Nguyen province”, Journal of Financial and Accounting Research, No 04 (177), Pages 61 - 63
3 Pham Hoai Nam, Do Thi Thuy Phuong (2020), “Using Explore Factor Analysis (EFA) Method to Assess the Effects Impact on Mobilization of Investment Capital for Socio-Economic Structure
Development in Thai Nguyen Province, Vietnam”, International Journal of Business and Management, Volume 8 Issue 9: 104 -113
4 Pham Hoai Nam, Do Thi Thuy Phuong (2020), “The Situation of Mobilizing Investment Capital Sources for Socio-economic Infrastructure Development in Thai Nguyen Province, Vietnam”
International Journal of Business and Management, Volume 8 Issue 10: 257-264
Trang 4INTRODUCTION
1 Regarding rationale of the Study
Thai Nguyen province, with its position as the political, socio-economic center
of the Northern midland and mountainous region, is the gateway for economic exchanges between the midland and mountainous region and the Northern Delta Thai Nguyen not only links with Hanoi and other provinces in the region, but also connects with seaports such as Hai Phong, Quang Ninh, border gates with China in the North, this is a great advantage of the province in order to develop regional socio-economics in general and the province in particular The Resolution of the 20th Thai Nguyen Provincial Party Congress identified synchronous infrastructure development as one of the strategic breakthroughs for the province's socio-economic development in the 2021-2030 period From 2015 to
socio-2019, the socio-economic infrastructure investment capital in Thai Nguyen province reached VND 38,204.6 billion, 1.6 times higher than the period 2010 -
2014, the average growth rate reached 6.1% The scale of investment capital is increasing, the capital structure is increasingly diversified Many infrastructure projects on traffic, irrigation, renovating and upgrading the power system, communication infrastructure, culture and society, etc have been put into operation, contributing to socio-economic development of Thai Nguyen province However, the reality shows that the system of socio-economic infrastructure construction of Thai Nguyen province is not synchronized, the number of high-quality construction is still small; Although the traffic network has been invested in renovation and upgrading, it has not yet met the requirements; multi-purpose infrastructure constructions are few, the investment efficiency is low due to lack of coordination in planning and management of traffic planning with irrigation, water supply and drainage, services, tourism training and education units are still lacking
in quantity, weak in quality, not meeting teaching and learning requirements; medical facilities and the medical servic quality have not met the demands, etc Besides, the mobilization of investment capital for socio-economic development still has many shortcomings The total investment capital for socio-economic development in the period 2015 - 2019 has only met 52.2% of the investment capital demand, of which the government development investment capital has met 78.6%; development investment capital of private and residential areas met 41.2%; ODA (Official development assistance) capital meets 25.4% and has not yet mobilized FDI (Foreign Direct Investment) capital In the period of 2021 - 2025, the provincial socio-economic development investment capital demand is 84,472.6 billion VND, but the ability to mobilize investment capital is about 52,631.9 billion VND, meeting 62.3%
of the demand of infrastructure investment capital
With the goal of turning Thai Nguyen province into a modern industrialized povince by 2030, a socio-economic center, is a growth pole with a spillover effect on the entire Northern midland and mountainous region, the study of solutions to
"Mobilizing investment capital to develop socio-economic infrastructure in Thai
Trang 5Nguyen province" in order to increase the mobilization of investment capital for
socio-economic development of Thai Nguyen province in the coming period is highly urgent and meaningful in both theory and reality, contributing to solving the difficult requirements that mentioned above
2 Research objectives of the thesis
The thesis is carried out to propose solutions to promote the mobilization of investment capital for socio-economic development in Thai Nguyen province, contributing to achieving the socio-economic development goals to 2025 and a vision to 2030
2.2 Specific objectives
- Systematize and contribute to clarifying theoretical and practical issues on the mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province
- Assess the current situation and point out the difficulties, obstacles and limitations in the activities of mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province
- Analyze factors affecting the mobilization of investment capital for economic infrastructure development in Thai Nguyen province
socio Propose solutions to increase the mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province in the coming period
3 Research object and scope
3.1 Research objects
The research object is the issues related to the mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province
3.2 Research scope
+ About space: Research was carried out in Thai Nguyen province
+ About time: Research and assess the current situation by collecting secondary information related to the mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province in the period of 2015 - 2019, compared with the period 2010 - 2014; the primary information is collected through the subject’s survey carried out in 2019 Solutions proposed for the period to 2025, vision to 2030
+ About the content:
- Assess the actual situation of the mobilization of investment capital for socio-economic infrastructure development, including determine the development goals; assess the plan implementation in the previous period; forecast demand and ability to balance investment capital; build up the investment plans of local capital mobilization; organize the implementation; inspect and supervise the mobilization of investment capital
Trang 6- Assess the mobilization of investment capital for socio-economic infrastructure development from the perspective of investment fields, including traffic system; irrigation system; system of power supply works; postal and telecommunications systems; water supply and wastewater and treatment systems; educational and training institutions; medical facilities; cultural and sports facilities
- Assess the mobilization of investment capital for socio-economic infrastructure development from the perspective of mobilized capital sources, including: the development investment capital of government budget; the development capital sources of government enteprises; the government development investment credit capital; capital sources of private enterprises; capital sources from credit institutions of the private sector; capital contributed
by the population; Government bonds; public - private cooperation; foreign investment capital
- Analyze factors affecting the mobilization of investment capital for economic infrastructure development
socio Propose solutions to increase the mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province
4 New contributions of the thesis
• The thesis carried out a theoretical basis about mobilizing investment capital for socio-economic infrastructure development Specifically, the thesis has introduced the concept and clarifying the characteristics of socio -economic infrastructure development at provincial level, the concept of the mobilization of investment capital for socio-economic infrastructure development and the content of capital mobilization for socio-economic infrastructure development investment at provincial level; relationship between development investment sources
• The thesis is the first research work that multi-dimensionally analyzes the actual situation of mobilizing investment capital for socio-economic infrastructure development in Thai Nguyen province in many different aspects such as: Demand forecasting and the ability to balance investment capital; develop local capital mobilization and investment plans; mobilization policy, mobilization structure and degree of meeting the demand for investment capital; inspect and supervise the mobilization of investment capital
• The thesis is the first research work using the examination factor analysis (EFA) method to determine the factors affecting the mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province The research results show that the impact level of these factors is different on the mobilization of investment capital for in socio-economic infrastructure development in Thai Nguyen province Specifically, the variable market size has the largest influence with beta coefficient of 0.635 and the variable of public service quality has the lowest influence with beta coefficient
Trang 7of 0.086 From there, the thesis proposed objectives, viewpoints and possible, suitable solutions to the specific conditions of Thai Nguyen province in order
to mobilize investment capital for socio-economic infrastructure development
in the coming time
5 Thesis layout
In addition to the introduction, conclusion, bibliography and appendices, the thesis is divided into 5 main chapters as follows:
Chapter 1: Overview of research works related to the thesis
Chapter 2: Theoretical and practical basis for mobilizing investment capital for socio-economic infrastructure development
Chapter 3: Research Methodology
Chapter 4: Situation of mobilizing investment capital to develop economic infrastructure in Thai Nguyen province
Chapter 5: Solutions to mobilize investment capital to develop economic infrastructure in Thai Nguyen province
socio-CHAPTER 1 OVERVIEW OF RESEARCH WORKS RELATED TO THE THESIS
1.1 Overview of research works abroad
In the world, there are many research works on infrastructure, mobilizing investment capital for infrastructure development Regarding the research content of the thesis, there are relevant works of Prud'homme (2004), Calderón and Servén (2004), UNCTAD (2013), Anjali Kumar et al (1997), Indira Rajaraman (2005), ESCAP (2016)…
1.2 Overview of domestic research works
In the recent years, in Vietnam, there have been research works on infrastructure, mobilization of investment capital for socio-economic infrastructure development, referring to basic theoretical issues about infrastructure in general and socio-economic infrastructure development in particular in aspects such as: Concept, characteristics, classification, role Some studies have referred to the basic theoretical issues on mobilizing investment capital for socio-economic infrastructure development such as: Classification
of capital mobilization, impact factors, content, mobilization methods, and assessment criteria Specifically, the research works of authors such as: Nguyen Duc Tuyen (2010), Nguyen Xuan Thanh (2010), CIEM (2010), Pham Thi Tuy (2009), Tran Minh Phuong (2012), Nguyen Ba An (2012), Dang Thi
Ha (2013), Nguyen Xuan Cuong (2017), Nguyen Viet Dung (2016), Vu Duc Bao (2019), Luong Duc Tan (2020)…
Trang 81.3 Obtained results of the study works related to the thesis
- The research on infrastructure development in general, socio-economic infrastructure in particular has basically just stopped at systematizing a number
of theoretical issues about infrastructure development; policies, funding framework, achievements and weaknesses and inadequacies, thereby proposing solutions to develop infrastructure to ensure promoting sustainable development The studies have mentioned the basic theoretical issues about mobilizing capital for socio-economic infrastructure development such as: Classification of capital mobilization, impact factors, content, mobilization methods, and mobilization assessment criteria
- Studies at each specific time, with different scales, methods and approaches have exploited the picture of the actual situation of capital mobilization for infrastructure development in general and socio-economic infrastructure in particular, associated with certain country or locality The research methods used in the above studies include: logical method; statistical methods, comparison, analysis and synthesis; descriptive methods and qualitative, quantitative analysis; professional methods; SWOT matrix method Especially, domestic research works have deeply analyzed and assessed the actual situation of mobilizing investment capital in specific infrastructure sectors such as roads, highways, medicine, economy, etc in some regions and localities from which to present the achieved results as well
as limitations in this work As for mobilizing investment capital for economic infrastructure development in Thai Nguyen province, there are a number of authors who have only studied a specific type of capital source such
socio-as ODA, the government budget or a specific infrsocio-astructure sector such socio-as rural infrastructure or road traffic
1.4 Gaps and problems that need further research of the thesis
An overview of previous studies shows that there are still some unresearched issues that the thesis needs to consider and solve as follows:
1.4.1 About the theory
The thesis needs to focus on clarifying the theoretical basis for the content
of the research topic that previous studies have not fully implemented, including: the concept of socio-economic infrastructure development, investment capital for socio-economic infrastructure development, the mobilization of investment capital for socio-economic infrastructure development and the content of mobilizing investment capital for socio-economic development at provincial level; relationship between development investment capital sources; explain the contents of mobilization of investment capital for socio-economic infrastructure development and assessment criteria; Studying the experience of mobilizing investment capital for socio-economic
Trang 9infrastructure development of some countries in the world and localities in Vietnam, thereby drawing lessons for Thai Nguyen province
1.4.2 About practice
- For studies on mobilizing investment capital in general, due to the generalization, it is not possible to go into depth and analyze the contents and characteristics of each capital source For the studies referring to investment capital mobilization channels, due to focusing on a specific mobilization channel, there have been in-depth and specific analyzes of the research objects, but the studies only focus on a specific mobilization channel without mentioning other important mobilization channels These research works were carried out in localities and regions with different characteristics, at different time intervals, so the research object has changed, the proposed solutions in each research work also has different values
- Currently, there is no research work in an updated and systematic way on mobilizing investment capital for socio-economic infrastructure development
in Thai Nguyen province Therefore, there are still many open issues, such as how is the situation of mobilizing investment capital for socio-economic development in Thai Nguyen province? What are the shortcomings and limitations in the mobilization and use of investment capital for socio-economic development of the province in recent years? What factors affect investment capital mobilization? What solutions to mobilize investment capital for socio-economic development in Thai Nguyen province in the coming time
- There have been a number of works using exploratory analysis (EFA); Vector autoregression (VAR) model… to determine the factors affecting the mobilization of investment capital for socio-economic development in a number
of specific countries or localities, but no works have been used the exploratory analysis (EFA) method yet to determine the factors affecting the mobilization of investment capital for socio-economic infrastructure development On the basis
of absorbing the results of previous studies, the author has selected relevant variables that are most suitable for the socio-economic conditions of Thai Nguyen province to include in the research model
- The author conducte an organizations and individuals investigation and survey of directly involved in the mobilization of investment capital for socio-economic infrastructure development in Thai Nguyen province based on a standardized questionnaire The analysis results of the collected data will show
a better overview of the research problem, assess the advantages and limitations in the implementation process, thereby completing the research gaps that have not been carried out yet
Trang 10Chapter 2
THEORETICAL AND PRACTICAL BASIS ON MOBILIZING INVESTMENT CAPITAL FOR SOCIO-ECONOMIC
INFRASTRUCTURE DEVELOPMENT
2.1 General theory of socio-economic infrastructure
2.1.1 Concept and characteristics of socio-economic infrastructure
2.1.1.1 The concept of socio-economic infrastructure
The socio-economic infrastructure at the provincial level is the entire system of physical and technical systems formed according to a certain structure, directly serving production and circulation, ensuring the general conditions for human development, protection of natural resources and environment, and national defense and security within a province The socio-economic infrastructure in the province includes the following main components: (i) economic infrastructure including: Traffic system, irrigation system, system of power supply works, postal and telecommunications systems; water supply, waste and wastewater treatment systems, ; (ii) social infrastructure including: Educational, medical, cultural, sports, scientific facilities
2.1.1.2 Characteristics of socio-economic infrastructure at provincial level
2.1.2 Classification of socio-economic infrastructure
2.1.2.1 Classification according to the management hierarchy
2.1.2.2 Classification by population area, territory
2.1.2.3 Classification according to socio-economic fields
2.1.2.4 Classification according to economic - technical quality standards
2.1.3 The role of socio-economic infrastructure
2.2 Investment capital to develop socio-economic infrastructure
2.2.1 The basic concepts
2.2.1.1 Development Investment
Development investment is a fundamental part of investment, which is the activity using the current capital to create new physical and intellectual assets, new production capacity and maintenance of existing assets, in order to create more jobs and for development purposes Development investment is a direct investment method in which the investment process increases the value and production and service capacity of the assets Through this investment behavior, the production capacity and service capacity of the economy also increase
2.2.1.2 Investment capital to develop socio-economic infrastructure
The investment capital for socio-economic infrastructure development: It is expressed in money of the entire value that society has spent in order to invest
in building a new system of socio-economic infrastructure development;
Trang 11renovate, upgrade, maintain and maintain the existing socio-economic infrastructure system, serving socio-economic development
Socio-economic development investment capital is formed from many different sources through mobilization methods, including domestic and foreign capital Investment capital is the basis, the foundation of development investment capital
2.2.2 Characteristics of investment capital to develop socio-economic infrastructure
2.3 Mobilizing investment capital to develop socio-economic infrastructure
2.3.1 The need to mobilize investment capital to develop socio-economic infrastructure
2.3.2 The basic concepts
2.3.2.1 Mobilizing investment capital to develop socio-economic infrastructure
Socio-economic development investment capital mobilization is the process
of finding, identifying, quantifying, and exploiting capital sources in the economy to carry out investment activities in socio-economic development In order to conduct investment in socio-economic development, it is necessary to plan and select methods to concentrate capital sources in the economy, specifically to solve problems such as: Determining the amount of capital needed? Where does the capital come from? The ability to balance capital? How to exploit capital?
2.3.2.2 Mobilizing investment capital to develop socio-economic infrastructure
at provincial level
Mobilizing investment capital for socio-economic development at the provincial level is the process by which the provincial government plans, issues and implements policies and measures to gather capital sources from objects in the economy with the purpose of investment in developing a synchronous and modern socio-economic infrastructure system; as well as organizing, directing, implementing and controlling capital mobilization activities to achieve the set goals The content of mobilizing investment capital for socio-economic infrastructure development is:
(i) Subjects of capital mobilization activities include Provincial People's Committee, District People's Committee and relevant departments such as Department of Finance, Department of Planning and Investment, Provincial Department of Taxation, Department of Home Affairs, Department of Transport Transport, Department of Construction, Department of Agriculture and Rural Development private economic units (enterprises, individual households), political and social organizations, financial institutions, banks, etc Diversified forms of mobilization from direct investment of individuals and enterprises, indirectly mobilized through the financial system, banking, securities (savings accounts, buying stocks, bonds .), participating in capital contribution to projects
Trang 12(ii) Objects of capital mobilization activities include: Forecast of investment capital demand; investment capital mobilization plan; making investment plans for socio-economic infrastructure development; organize and direct the implementation of capital mobilization activities; inspect and supervise activities of capital mobilization for socio-economic development investment
2.3.3 Classification of capital mobilization for investment in the development
of socio-economic infrastructure
2.3.3.1 According to funding sources
2.3.3.2 In the form of mobilization
2.3.3.3 According to the purpose of mobilization
2.3.4 Methods of mobilization and the relationship between investment capital sources for socio-economic infrastructure development
2.3.4.1 Mobilizing the government development investment capital
2.3.4.2 Mobilizing development investment capital of private and citizens 2.3.4.3 Mobilizing development investment capital from foreign direct investment capital
2.3.4.4 Mobilizing development investment capital from official development aid funds
2.3.4.5 The relationship between investment capital sources
2.3.5 Contents of state management on mobilizing investment capital for socio-economic infrastructure development
2.3.5.1 Determining the goals of socio-economic infrastructure development
2.3.5.2 Assess the implementation of the previous period's plan, forecast demand and the ability to balance investment capital
2.3.5.3 Develop local capital mobilization and investment plans
2.3.5.4 Organize the implementation of capital raising activities
2.3.5.5 Inspect and supervise investment capital mobilization
2.3.6 Factors affecting the mobilization of investment capital for economic infrastructure development
socio-2.4 Experience in mobilizing investment capital for socio-economic infrastructure development
2.4.1 Experience of some countries in the world
The thesis focuses on analyzing the experience of mobilizing investment capital for socio-economic infrastructure development through the government-private cooperation method of the two countries, are Korea and Chile
2.4.2 Experiences of some localities in Vietnam
The thesis focuses on analyzing the experience of issuing local government bonds in Ho Chi Minh City, mobilizing ODA capital of Thanh Hoa province and public-private partnership form of Bac Ninh province
Trang 132.4.3 Lessons learned to Thai Nguyen province
Firstly, Thai Nguyen province needs to develop a mechanism to support and encourage enterprises to invest in infrastructure projects such as: Tax and fee support; allocating financial resources to counterpart PPP projects to ensure the project's financial feasibility; compensation and site clearance support; connecting investors and banks, credit institutions to provide enterprises with preferential credit programs with medium and long-term loan terms and reasonable lending interest rates
Secondly, Thai Nguyen province needs to develop a plan for issuing local government bonds, determine capital mobilization limits, develop a plan for mobilizing and repaying interest and principal and a list of projects to be invested When the Government allows the issuance of local government bonds, it is necessary to link the primary offering market with the secondary trading market; at the same time, to ensure efficiency and reduce issuance costs, we should focus on underwriting and bidding methods via the stock exchange
Thirdly, in order to attract and effectively use ODA capital, Thai Nguyen province needs to enlist the support of ministries and central agencies and existing relationships with some major donors such as Japan, Korea, World Bank, Asia Bank Also, remove bottlenecks in compensation, site clearance and resettlement, and create conditions for infrastructure construction on schedule; rationally allocate capital and speed up the disbursement of ODA capital
Chapter 3 RESEARCH METHODS
3.4 The method of data collection
3.4.1 Secondary data collection
3.4.2 Primary data collection
3.4.2.1 Expert interview
The thesis conducted in-depth interviews with pre-prepared content The questions focused on issues related to the current situation and factors affecting the mobilization of investment capital for socio-economic infrastucture development in Thai Nguyen province To conduct the interview, the author carried out the following steps: