The Role of Local Government in Private Investment Intentions: A Case Study in Vietnam

Abstract

The private economy is regarded as one of the nation's most important economic components. Local governments take a variety of steps to attract private investment. In this study, the methodology is based on a SEM (structural equation modeling) model utilizing data gathered from 265 private businesses. According to the research findings, all six factors influence the investment intentions of businesses: the infrastructure, labor, administrative procedures, land policy, transparency, support from local government. The method is based on a SEM (structural equation modeling) model with 265 private enterprise data. According to the findings of the study, the following six factors influence the investment intentions of businesses: the infrastructure, labor, administrative procedures, land policy, transparency, support from the local government. Moreover, fsQCA (fuzzy set qualitative comparison analysis) with the same dataset reveals that investment intention is composed of two groups of factors. The infrastructure, labor, support from the local government, administrative procedures, and transparency comprise the first group. The second group includes labor, support from the local government, land policy, administrative procedures, and transparency.

Private Investment and Economic Development: Ensuring Sustainability in the Future

“…Private enterprises, after generating profits, contribute a substantial portion to the state through taxes and fees. Consequently, public investment can take new developmental steps [43,44].…”

“…Firstly, private investment capital is increasingly being directed into various industries and sectors, creating many new employment opportunities [52]. Small and medium-sized private enterprises, in particular, have been established in growing numbers, generating numerous jobs, especially in economically disadvantaged regions, thus alleviating unemployment pressures in each country [44]. Secondly, private enterprises always seek to maximize profits, leading to increased competitiveness.…”