The impact of public investment on private investment in Vietnam

Abstract

Subject. The article considers the impact of public investment on private investment in Vietnam. Objectives. The purpose is to assess the long-term impact of public investments on private ones in Vietnam. Methods. The study employs panel data from 63 provinces of Vietnam for the period from 2005 to 2023, using FMOLS and DOLS methods. Results. The study established that public investments have a positive effect on private ones. Public investments created a favorable investment environment, and public investment projects proved their effectiveness, which led to an increase in private investment. Furthermore, Vietnam's stable economy is very attractive to foreign private investors. To use this advantage, Vietnam is expanding the international market, implementing administrative reforms, and providing the most favorable conditions for private investors. Conclusions. Rapid and stable economic growth in Vietnam requires the attraction and effective use of private investment capital. To achieve this goal, it is necessary to take measures to improve the efficiency of public investment. These measures include the selection of important sectors of public investment, strict adherence to measures to prevent losses, development of long-term public investment strategies, and creation of a favorable investment environment for private investment.