Tài liệu Environment factors for foreign direct investment for american business corporation in three main commercial centers of vietnam

THAI NGUYEN UNIVERSITY SOUTHERN LUZON STATE UNIVERSITY Socialist Republic of Vietnam Republic of the Philippines NGUYEN ANH TUAN (English name: Raphaen) Doctoral Dissertation “ENVIRONMENT FACTORS FOR FOREIGN DIRECT INVESTMENT FOR AMERICAN BUSINESS CORPORATION IN THREE MAIN COMMERCIAL CENTERS OF VIETNAM” Scientific supervisor: Associ. Prof. Do Anh Tai Hanoi – 2013 ENVIRONMENT FACTORS FOR FOREIGN DIRECT INVESTMENT FOR AMERICAN BUSINESS CORPORATION IN THREE MAIN COMMERCIAL CENTERS OF VIETNAM A Doctoral Dissertation Presented to the Faculty of the Graduate School of Southern Luzon State University in Collaboration With Thai Nguyen University In Partial Fulfilment of the Requirements for the Degree of Doctor in Business Administration NGUYEN ANH TUAN May 2013 ii Nguyen Anh Tuan Raphaen ACKNOWLEDGMENT This research was a process of learning that asked for the involvement of individuals, companies and institutions. During my research period, I received unconditional co-operation from many individuals/organizations, and their support was a key factor in successfully completing the Dissertation. I greatly appreciate the contribution of everyone involved and I apologize to those I do not mention by name. First of all, I am especially grateful to my supervisors, Professor Do Anh Tai, who provided me with valuable guidance and comments throughout the research period. I also thank my supervisor for giving me the opportunity to work in the area of my interest. I would also like to thank the members of the reading for reading the manuscript and for providing me with constructive comments. During the period of data collection, I visited both the Vietnam and US institutions. To begin with, I would like to express my gratitude to the following members of the institutions for their willingness to be interviewed and also for spending time and effort in filling questionnaires: Departments of Planning and Investment (Hanoi, Ho Chi Minh city, Da Nang); Foreign Investment Agency – Ministry of Planning and Investment; I extend especial thanks to the board of Rectors of Hanoi University of Industry for permitting me to follow the doctoral course and great favorable conditions for me to accomplish this doctoral course. I would also like to express my gratitude to Thai Nguyen University, Southern Luzon State University and their professors for organization, support and help during the doctoral course. Thai Nguyen University iii Southern Luzon State University Nguyen Anh Tuan Raphaen I wish to express my sincere thanks to my families for their continual encouragement, love, and prayers for my progress and success. Finally, I am greatly indebted to my wife for her love, moral support, understanding and great encouragement. Hanoi, 8th June 2013 Nguyen Anh Tuan Thai Nguyen University iv Southern Luzon State University Nguyen Anh Tuan Raphaen DEED OF DECLARATION I, Tuan NGUYEN ANH., hereby submit my Dissertation for oral examination, entitled “Environment factors for foreign direct investment for American business corporations in three main commercial ceters of Vietnam””, truthfully declare that the said paper is a product of my original research investigation. The data presented in the paper have clear origin. PhD candidate Nguyen Anh Tuan Thai Nguyen University v Southern Luzon State University Nguyen Anh Tuan Raphaen TABLE OF CONTENTS DEED OF DECLARATION...................................................................................... V LIST OF TABLES ..................................................................................................XIV LIST OF TABLES ..................................................................................................XIV LIST OF FIGURES ................................................................................................XVI APPROVAL SHEET ............................................................................................... XX CHAPTER 1 ...............................................................................................................21 INTRODUCTION......................................................................................................21 Background of the Study .................................................................................................21 Statement of the Problem..................................................................................................22 Objectives.......................................................................................................................24 Hypothesis......................................................................................................................25 Scope and limitation of study.............................................................................................25 Significance of study........................................................................................................26 Definition terms...............................................................................................................27 CHAPTER 2 ...............................................................................................................32 REVIEW OF LITERATURE AND RELATED STUDIES.............................................32 1. FOREIN DIRECT INVESTMENT (FDI) THEORY..................................................32 1.1. Concept and features ..........................................................................................32 1.1.1. Concept ..........................................................................................................32 1.1.2. Features ..........................................................................................................33 1.2. FDI classification.................................................................................................35 1.2.1. Joint – venture company ................................................................................35 1.2.2. Enterprise with 100% foreign capital ............................................................36 1.2.3. Business cooperation contract........................................................................37 Thai Nguyen University vi Southern Luzon State University Nguyen Anh Tuan Raphaen 1.2.3. Other forms of FDI ........................................................................................37 1.3. Roles of foreign direct investment .....................................................................40 1.3.1. Impact of FDI on investors and investor’s country .......................................40 1.3.2. Impact of FDI on investment receiving country ............................................41 2. OVERVIEW OF INVESTMENT ENVIROMENT ...........................................46 2.1. Concept ................................................................................................................46 2.2. Characteristics of the investment environment ...............................................47 2.2.1. Synthetic feature ............................................................................................48 2.2.2. Mobile (dynamic) feature ..............................................................................48 2.2.3. Openness feature............................................................................................48 2.2.4. Systematic feature..........................................................................................49 2.3. Classification of investment environment.........................................................50 2.3.1. Classification by national management function ...........................................50 2.3.2. Classification by channels of factors affecting investment activity...............50 2.3.3. Classification by constituent elements...........................................................50 2.3.4. Classification by scopes .................................................................................50 2.3.5. Classification by phases of formation and investment activities ...................51 2.3.6. Classification by causes for capital flows ......................................................51 3. IMPACT OF INVESTEMENT ENVIRONMENT ON FDI ATTRATION ...51 3.1. Factors from investment environment in the host country countries ............51 3.1.1. Natural environment ......................................................................................51 3.1.2. Politic environment........................................................................................52 3.1.3. Law and policy environment .........................................................................53 3.1.4. Economical environment ...............................................................................54 3.2. Factors from invironment in investor’s countries ...........................................56 Thai Nguyen University vii Southern Luzon State University Nguyen Anh Tuan Raphaen 3.2.1. Macroeconomic policy.................................................................................56 3.2.2. International legal for oversea investment .....................................................57 3.2.3. Economic, scientific and technological potential .........................................58 3.3. Factors from international investment environment.......................................59 3.3.1. General trend of cooperation between regions and countries ........................59 3.3.2. General trend of regional lingkage and globalization....................................59 3.3.3. Establishment and development of transnational companies ........................60 4. ATTRACTING FDI EXPERIENCE WORLD-WIDE ......................................62 4.1. Attracting FDI experience of some countries ...................................................62 4.1.1. China ..............................................................................................................62 4.1.2. Malaysia.........................................................................................................64 4.1.3. Thailand .........................................................................................................66 4.1.4. Singapore .......................................................................................................67 4.2. Experience for Vietnam......................................................................................68 4.3. Role of FDI on socio-economic development in Vietnam................................70 4.3.1. Enhancement of investment capital ...............................................................70 4.3.2. Promotion of economic structure transfer, work creation for employee .......70 4.3.4. Contribution of infrastructure and techniques forming for the industrialization and modernization process............................................................71 4.3.5. Contribution of national budget increase.......................................................72 5. REVIEW OF RELATED STUDIES....................................................................72 6. CONCEPTUAL FRAMEWORK.........................................................................75 CHAPTER 3 ...............................................................................................................77 METHODOLOGY.......................................................................................................77 1. RESEARCH DESIGN ...........................................................................................77 Thai Nguyen University viii Southern Luzon State University Nguyen Anh Tuan Raphaen 2. LOCATION OF THE STUDY .............................................................................79 4. SAMPLE SIZE AND SAMPLING TECHNIQUE .............................................81 5. DATA COLLECTION PROCEDURE................................................................83 Figure 2. Data collection process ..............................................................................85 6. STATISTICAL ANALYSIS .................................................................................86 CHAPTER 4 ...............................................................................................................87 RESESULT AND FINDINGS ..................................................................................87 1. RESEARCH BACKGROUND - AN OVERVIEW OF FDI ENVIRONMENT IN VIETNAM AND THE UNITED STATE ...........................................................87 1.1. General investment environment of Vietnam ..................................................87 1.1.1. Politic environment........................................................................................87 1.1.2. Geographic and Infrastructure environment ..................................................89 1.1.3. Economical and Financial Environment ........................................................92 1.1.4. Institutional and Administrative Management environment ...........................95 1.1.5. Labor environment.........................................................................................96 1.2. Trend of FDI attraction in Vietnam..................................................................98 1.2.1. Economic growth forecast for Vietnam .........................................................98 1.2.2. Comments about FDI from the U.S in Vietnam during 2013 – 2020............99 1.3. POLICIES OF THE U.S ON ABROAD INVESTMENT ............................102 1.3.1. Summary of the United States .....................................................................102 1.3.2. Practice of FDI from the US in Vietnam .....................................................110 2. RESULTS OF SURVEY ON FDI ENVIRONMENT IN VIETNAM.............119 2.1. Foreign Enterprise’s Assessement...................................................................120 2.1.1. Process of receiving a project under OSS (One-Stop-Shopping) mechanism ................................................................................................................................120 Thai Nguyen University ix Southern Luzon State University Nguyen Anh Tuan Raphaen 2.1.2. Infrastructure................................................................................................121 2.1.3. Investment supporting policy.......................................................................121 2.1.4. Rapid work clearance...................................................................................122 2.1.5. Ensurement of supplying raw materials, supporting industries ...................122 2.1.6. Review of foreign investors about the attractiveness for FDI .....................123 2.2. The State administrator’s assessement ...........................................................125 2.2.1. Politic evironment........................................................................................125 2.2.2. Institutional and management environment.................................................126 2.2.3. Geographic and infrastructure environment ...............................................127 2.3. Foreign investor’s assessement ........................................................................128 2.3.1 Evaluating the reliability of statistic data......................................................128 2.3.2. Descriptive statistics ....................................................................................134 2.3.3. ANOVA analysis .........................................................................................135 2.3.4. Hypothesis Testing......................................................................................139 2.3.5. Factor analysis on regression model ............................................................142 CHAPTER 5 .............................................................................................................147 CONCLUTIONS AND RECOMMENDATIONS ................................................147 1. CONCLUSIONS ..................................................................................................147 2. RECOMMENDATION FOR ATTRACTING THE U.S FDI.........................150 2.1 Shorterm solutions .............................................................................................151 2.1.1. Politic environment......................................................................................151 2.1.2. Institutional- Administrative Management ..................................................151 2.1.3. Geographic- Infrastructure...........................................................................153 2.1.4. Economic- Finance ......................................................................................155 2.1.5. Solutions related to human resources ..........................................................159 Thai Nguyen University x Southern Luzon State University Nguyen Anh Tuan Raphaen 2.2. Longterm solutions ...........................................................................................160 2.2.1. Promote the development of supporting industries .....................................160 2.2.2. Continuing negotiation, conclusion and implementation of the Trans-Pacific Partnership Agreement (TPP) ................................................................................161 2.2.3. Develop specific policies to attract capital and technology from the MNC 162 2.2.4. Strengthening information and communication, policy and advocacy for the country to invest overseas......................................................................................163 Vietnamese references .............................................................................................166 English references ....................................................................................................168 Websites ....................................................................................................................168 REFERENCES.................................................................................................... - 216 - Thai Nguyen University xi Southern Luzon State University Nguyen Anh Tuan Raphaen ABSTRACT During the past 25 years, FDI in Vietnam including FDI from the United States has been continuously expanding and developing. It becomes an important part of the economy. To get these positive results, Vietnam has been constantly improving the investment environment in order to create attractive high competitive investment environment. As a strongest economy of the world, the U.S. FDI projects are typically largescale associated with source technology, high technology. Since the reestablishment Vietnam - U.S. diplomatic relation, FDI from the United States in Vietnam plays an important contribution to the process of industrialization and modernization of the country, improves economical, political and military roles of Vietnam. However, US FDI in Vietnam is incommensurable with advantageous potential of two countries. In order to attract efficiently the US FDI, Vietnam requires more improvement of investment environment which is more and more increasingly attractive and competitive compared with other countries in the region. A survey on 63 US investors, 30 state management agencies and 99 FDI enterprises was carried out in three main commercial centers of Vietnam (Hanoi, Da Nang, Ho Chi Minh city) in order to find advantage and/or disadvantage of subfactors of investment environment in Vietnam, then providing some prospective solutions for investment environment improvement in coming years. Results shows that Vietnam need to improve policies that ensure more investor’s right and also policies that petitioner all corruption phenomenon and policies that has no distinction between domestic and foreign investors. Vietnam also has to improve traffic, storage system, harbor… In term of labor quality, it is needed to create more strict linkage Thai Nguyen University xii Southern Luzon State University Nguyen Anh Tuan Raphaen between vocational training centers, schools with enterprises; these training centers must build training programs and graduated standards corresponding to typical requires of enterprises, especially it must focus on professional awareness of labors. It also needed to expand training linkage with international high quality training institutions in order to enhance training quality and there therefore labor quality that approaches international standard. On the other hand, Vietnam should better improve economical and financial policies such as stable currency exchange rates… In summary, Vietnam needs to enhance synchronously factors of investment environment in accordance with regional and international commands. Thai Nguyen University xiii Southern Luzon State University Nguyen Anh Tuan Raphaen LIST OF TABLES Table 1. Factors affecting the FDI............................................................................80 Table 2. Number of surveyed samples .....................................................................82 Table 3. Comparation of transportation cost ..........................................................91 Table 4. GDP growth in Southeast Asian countries ...............................................94 Table 5. Forecast of GDP of some Asia countries in coming years .......................98 Table 6. U.S. FDI structure by investment form..................................................112 Table 7. Assessment of foreign enterprise on OSS mechanism. ..........................120 Table 8. Assessment of foreign enterprise on infrastructure quality ..................121 Table 9. Assessment of foreign enterprise on investment supporting policy .....121 Table 10. Assessment of foreign enterprise on work clearance activity .............122 Table 11. Assessment of foreign enterprise on raw material supply ensurement ....................................................................................................................................123 Table 12. Assessment of foreign enterprise on the attractiveness for FDI .........123 Table 13. Opinion of state administrator on politic environment .......................125 Table 14. Cronbach’alpha of Political environment.............................................129 Table 15. Cronbach’alpha of Institutional and management environment .......129 Table 16. Cronbach’alpha of Infrastructure and Geographic environment.......131 Table 17. Cronbach’alpha of Economical and Financial environment ..............132 Table 18. Cronbach’ Alpha of Labor environment ..............................................133 Table 19. Cronbach’ Alpha of Investor's determination .....................................133 Table 20. Illustration method of calculating group variables via mean value ...134 Table 21. Mean value of statistic variables............................................................135 Table 22. Post Hoc Tests on Political environment...............................................136 Thai Nguyen University xiv Southern Luzon State University Nguyen Anh Tuan Raphaen Table 23. Post Hoc Tests on Institutional and management environment .........136 Table 24. Post Hoc Tests on Infrastructure and Geographic ..............................137 Table 25. Post Hoc Tests on Economical and financial environment .................138 Table 26. Post Hoc Tests on labor environment....................................................139 Table 27. Pearson correlation coefficient between variables ...............................140 Table 28. Statistics of developed regression models .............................................143 Thai Nguyen University xv Southern Luzon State University Nguyen Anh Tuan Raphaen LIST OF FIGURES Figure 1. Framework of the research.......................................................................76 Figure 2. Data collection process ..............................................................................85 Figure 3. Structure of U.S. FDI among G7 countries ...........................................108 Figure 4. FDI from the United States in Vietnam during the period 1988-2012111 Figure 5. U.S. FDI structure by investment form .................................................114 Figure 6. The U.S. FDI structure by investment sector........................................116 Figure 7: The US FDI structure by region (USD/Province) ................................118 Figure 8. The U.S. FDI position in the FDI structure in Vietnam (USD/ State) 119 Thai Nguyen University xvi Southern Luzon State University Nguyen Anh Tuan Raphaen LIST OF APPENDIES APPENDIX 1. BIBLIOGRAPHY ..........................................................................166 APPENDIX 2. SURVEY QUESTIONNAIRE ......................................................170 APPENDIX 3. CURRICULUM VITAE ........................................................... - 188 APPENDIX 4. PUBLICATIONS RELATED TO THE DISSERTATION... - 193 APPENDIX 5. ANOVA ANALYSIS ................................................................ - 194 APPENDIX 6. POST HOC TESTS.................................................................. - 196 APPENDIX 7. LINEAR REGRESSION ......................................................... - 198 APPENDIX 8. THE US INVESTORS' DETERMINATION ......................... - 203 APPENDIX 9. DIRECT INVESTMENT ABROAD BY THE UNITED STATES AND OTHER G7 COUNTRIES........................................................................ - 204 APPENDIX 10. TOTAL FDI FROM THE UNITED STATES IN VIETNAM PERIOD 1988-2012............................................................................................. - 205 APPENDIX 11. FDI FROM THE UNITED STATES IN VIETNAM BY INVESTMENT FORM - PERIOD 1988 - 2011. .............................................. - 207 APPENDIX 12. FDI FROM THE UNITED STATES IN VIETNAM BY INVESTMENT SECTOR - PERIOD 1988 – 2011. ......................................... - 208 APPENDIX 13. FDI FROM THE UNITED STATES IN VIETNAM BY PROVINCES - PERIOD 1988 – 2011 ............................................................... - 210 APPENDIX 14. FDI IN VIETNAM BY INVESTING COUNTRIES - PERIOD 1988 – 2012........................................................................................................... - 213 - Thai Nguyen University xvii University Southern Luzon State Nguyen Anh Tuan Raphaen LIST OF ABBREVIATIONS SYMBOL Explaination AFTA ASEAN Free Trade Area ASEAN Association of Southeast Asian Nations BCC Business Cooperation Contract BOT Build – Operation – Transfer Contract BT Build – Transfer Contract BTO Build – Transfer – Operation Contract EU European Union FDI Foreign Direct Investment ICOR Incremental Capital - Output Rate IMF International Monetary Fund KCN, KKT, KCX Industrial zone, Economic zone, Processing zone for export NEU National Economic University MNCs Multinational Companies MPI The Ministry of Plan and Investment (Vietnam) NSNN National budget ODA Official Development Assistant OECD Organization for Economic Co-operation and Development PCI Provincial Competitiveness index PPP Public Private Partnerships R&D Reserch and Development TNCs Transnational Companies UBND People's Committees Thai Nguyen University xviii University Southern Luzon State Nguyen Anh Tuan Raphaen UNCTAD United Nations Conference on Trade and Development USD U.S Dollars VCCI Chamber of Commerce and Industry of Vietnam VĐK Registered capital VND Vietnam currency (Dong) VTH Implement capital WB World Bank WTO World Trade Organization Thai Nguyen University xix Southern Luzon State University Nguyen Anh Tuan Raphaen APPROVAL SHEET This Dissertation , entitled “ENVIRONMENT FACTORS FOR FOREIGN DIRECT INVESTMENT FOR AMERICAN BUSINESS CORPORATION IN THREE MAIN COMMERCIAL CENTERS OF VIETNAM”, prepared and submitted by Nguyen Anh Tuan in partial fulfillment of the requirements for the degree of Doctor in Business Administration, has been examined and recommended for acceptance and approval for FINAL EXAMINATION. DO ANH TAI, PhD Adviser Approved by the Committee on Oral Examination with a grade of PASSED on …. 2013 Dr………………………..………………….. Member Dr………………………..………………….. Member Dr………………………..………………….. Member Dr………………………..………………….. Chairman Accepted in partial fulfillment of the requirements for the degree of Doctor in Business Administration. THAI NGUYEN UNIVERSITY SOUTHERN LUZON STATE UNIVERSITY Dean Thai Nguyen University Dean xx Southern Luzon State University