TAILIEUCHUNG - Does public investment crowd in or crowd out private investment in Vietnam

This paper investigates the relationship between public investment and private investment to determine whether public investment crowds in or crowds out private investment. In the research, the Structural Vector Autoregressive (SVAR) model will be employed to analyze effects of structured variables in the model. | ECONOMIC DEVELOPMENT No. 205, September 2011 DOES PUBLIC INVESTMENT CROWD IN OR CROWD OUT PRIVATE INVESTMENT IN VIETNAM? by Assoc. Prof., Dr. SÖÛ ÑÌNH THAØNH * Public investment is the primary channel for economic infrastructures. During the economic transition, Vietnam’s government has promulgated fiscal expansion policies by increasing public investment in the hope that public investment might positively influence the economic productivity as a whole and crowd in private investment. Vietnam, in recent years, has tried its best to control and cut back on public investment in an attempt to curb inflation. Thus what is the effect of cutbacks in public investment on private investment? This paper investigates the relationship between public investment and private investment to determine whether public investment crowds in or crowds out private investment. In the research, the Structural Vector Autoregressive (SVAR) model will be employed to analyze effects of structured variables in the model. The research finds that public investment helps crowd in private investment in a long run. Finally, some solutions will be recommended for improving public investment policies of Vietnam in future. Keywords: public investment, private investment, crowding-in, crowding-out effect, FDI, gross investment 1. Theoretical framework There are two economic schools concerning effects of public investment on private one. The neoclassical economics hold the view that expansion of public investment can improve the investment climate and cut back on cost for private investment via an improvement in infrastructure, quality and supply of human resource. When the economy operates below its potential level, raising the aggregate demand via expansion of public investment can crowd in private investment (IMF, 2007). If this theory would be correct, it is probable to assert that public investment facilitates private one. Public investment, however, might also crowd out private investment. The

• Kinh tế học
• Public investment
• Private investment
• Crowding in
• Crowding out effect
• Gross investment
• Structural vector autoregressive
• Impact of public investment
• Public investment and private investment
• Socio economic issues
• Restructuring Vietnam’s public investment
• Restructuring of public investment
• Pinpoint drawbacks
• The structure of public investment
• Economic growth
• Evidence from Vietnam
• Public investment on private investment
• Private domestic investment
• Public private partnership investment
• Investment decisions
• Budget overspend
• Public debt
• Public financial policy
• Finance market
• Stateowned companies
• Summary of Doctoral thesis
• Effectiveness of public investment
• The agriculture area
• Practical issues of public investment
• The agricultural sector
• Leadership behavior
• Public management
• Construction investment
• Road infrastructure
• Public investment management
• Summary of Doctoral thesis Finance – Banking
• Current period in Vietnam
• Managing Vietnam’s public investment
• Luận văn Thạc sĩ Tài chính ngân hàng
• Finance Banking
• Efficiency of public investment
• Promote disbursement of public investment
• Food security
• Capital formation
• Agriculture in Karnataka
• Summary of Doctoral thesis in Economics
• Context of climate change
• Investment management
• Greenfield Investment
• Cross border M&As
• Foreign direct investment
• Public service sectors
• Transportation sectors
• Public infrastructure
• Investment and development
• Evidence from turkey
• Development public infrastructure
• Gross enrolment rate
• Infant mortality rate
• Doctoral thesis on Law
• Laws on investment
• Public private partnership
• Public private partnership in Vietnam
• Impact of public expenditure
• Public expenditure on private investment
• Policy implications for Vietnam
• Public administration
• State management
• Investment projects
• State budget
• Higher education
• Postgraduate education
• Doctor of public administration
• Postgraduate education in Vietnam
• Managerial finance
• Lecture Managerial finance
• Financial statements
• Initial public offerings
• Investment banking
• Financial restructuring
• Dynamic OLS
• Enhancing quality
• Carry evaluation
• Environmental factors
• GMM Arellano Bond
• Provinces in Vietnam
• Growth relationship in Vietnam
• Summary thesis Doctoral
• Managing investment project
• Infrastructure construction
• The form of Public Private Partnership
• Improve the management
• Summary of PhD thesis
• Summary of PhD thesis in Public Management
• Reforms of administrative procedures
• Investment in Thai Nguyen province
• Administrative procedures
• Dissertation abstract Construction mannagement
• Risk management
• Technical infrastructure construction
• Investment projects in Da Nang