An D.1
  • 1 Thai Nguyen University of Economics and Business Administration (TUEBA), Thai Nguyen, Viet Nam

Unlocking the Secrets: Private Investments and the Remarkable Evolution of Vietnam's Economy

2024. Т. 28. № 1. С. 159–183 [содержание номера]
In recent years, the Vietnamese economy has achieved significant accomplishments, with private investment playing a crucial role in these contributions. As the country entered the 21st century, the private sector's significance in Vietnam's economic development has been increasingly evident through the rising levels of investment, increased employment, greater contributions to the state budget, and overall GDP growth. This article aims to provide robust evidence of the short-term and long-term contributions of private investment to the remarkable economic growth of Vietnam from 2000 to 2022. The study collected data from all 63 provinces and municipalities of Vietnam during the period from 2000 to 2022. Using the collected data, the study employed the results of the Panel Mean Group (PMG) model, selected among three models (PMG, MG, DFE) through Hausman testing. Through the Dynamic Panel Threshold Model, the study accurately identified a maximum threshold ratio of Private investment/GDP at 32.2754%. Surpassing this ratio would lead to a situation of high inflation, an overheated economy, and exceeding production limits. Finally, causal inference from the panel data was utilized to analyze the relationship between private investment and other variables in the model. The study expanded the perspective on private investment's impact on economic growth. In the initial period, private investment activities encountered difficulties leading to inefficient investments and a negative impact on economic growth. However, with flexibility and good adaptability to the market, and efficient utilization of input factors, private investment made positive contributions to economic development over time. Furthermore, through causal inference testing, the study demonstrated a causal relationship between private investment and infrastructure investment, human capital, employment, government expenditure, and trade openness. Finally, the study proposed policy implications for the Vietnamese government to enhance the effectiveness of private investment and further contribute to economic growth.
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