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1 BACKGROUND Rationale Special Economic Zone (SEZ) is a general term covering Free Trade Zone (FTZ), Export Processing Zone (EPZ), Economic Zones (EZs), and Free Ports (FPs) (UNIDO, 2015) Initially, special economic zones were understood as free zones, which existed in international trade for about 2,500 years, for the first time in ancient China, then in the Roman Empire (World bank, 1992) In the form of free ports, EZs used to focus on infrastructure development and were defined as "production models combined with industrial technologies, providing an infrastructure, facility and material to attract domestic and foreign investors" (Amado, 1989) Economic zones have become quite popular in the world today and are known as "geographical areas where economic laws are more liberal than the general legal system of the state" (Chikatisrinu, 2013) Economic zones are increasingly asserting their role in socioeconomic development By 2015, there are around 4,500 SEZs in 140 countries employing around 66 million people worldwide (UNIDO, 2015) In Vietnam, the economic zone has been identified as a breakthrough model for the economic development of the region on the basis of exploitation of natural advantages and geographic location Since 2003, the Chu Lai Economic Zone has been the first open economic zone to be established Up to now, 18 coastal economic zones have been established under this model (within the scope of this thesis is abbreviated as EZ) of which 16 are already in operation The EZ attracted an estimated 300 FDI projects with a total investment of more than US $ 39 billion and approximately 840 domestic investment projects with total investment capital of nearly VND 566 trillion (Ministry of Planning and Investment, 2015) The establishment and development of EZs have contributed significantly to the socioeconomic development, security and defense of the country This is also the right policy, contributing actively to transfer a part of agricultural labor force, rural (low productivity area) to industrial and service sectors with high productivity However, after more than 10 years of establishment and operation, EZs of Vietnam have not yet shown their role as a driving force for regional development as the original target; The development coorination of branches and domains in EZs according to strategies, master plans has not been implemented well , especially the low occupancy rate of EZs The business registration projects have not much, meanwhile many registered projects without the implementation forced cancellation; the infrastructures of economic zones have not met development needs Some investors have implemented large investment projects, of which there has few modern technology projects (Tran Dinh Thien, 2014, Vo Dai Luoc, 2009) In particular, the institutions of the Vietnam Economic Zone have not really to be the "breakthrough" as the special economic zones of China, India (Nguyen Quang Thai, 2010) Therefore, the nature of economic zones in Vietnam is not really different compared to other industrial zones Therefore, in Vietnam, is a "breakthrough" institution really needed for the economic zone? There are a number of studies and policies proposed to develop economic zones, particularly are about investment incentives However, not many researchers have evaluated the attraction of investment from the investors’ perspective, who are businesses or customers of EZ The Nghi Son Economic Zone was established in 2006 and is one of five key economic zones to be invested by the Centre Buget for the period of 2013 to 2015 By the end of 2015, 149 projects have registered to Nghi Son EZ with the registered capital of more than US $ 16.8 billion (VND 97 trillion and US $ 12.3 billion) (Nghi Son Industrial Zones, 2015) Of which, Nghi Son Petrochemical Refining Project is the largest investment project in the country with registered capital of more than billion USD Resolutions of the 17th Party Congress of Thanh Hoa province have identified to built and develop Nghi Son EZ to become the economic center of the province and region; this is the driving force for the socio-economic development of the province In addition to the initial successes of the province on investment attraction efforts, Nghi Son EZ faces many common limitations of EZs, especially the number of projects that have been put into operation is low (74 projects in 2015); the infrastructure is not complete, preferential policies and management mechanisms are not attractive as the characteristics of the open economic zone At present, the Government, localities and the management boards of economic zones are always concerned with the development of EZs From the authors review of the study, there are many researches to find solutions to develop EZs in general and EZ in particular However, to develop the key economic zone is to have investors in the EZ, so indentifying the factors that affect their investment decision, from those propose solutions to attract investors, is more essential There are many domestic and foreign studies on investment decisions However, attracting investment in general and attracting investment for the EZ only considers factors that attract investment (outside the enterprise), but the actual investment decision depends on many factors in the business In addition, EZ is a new economic model with favorable business conditions in terms of location, management mechanism and infrastructure conditions Therefore, the assessment of internal and external factors affecting the investment decision of the business is necessary The dissertation will study from the perspective of investment firms to determine which factors really affect their initial decision to EZ? Among those factors, which factors play important role, which factor is less important? In addition, on the enterprise perspective of choosing the investment location, investors always consider the factors to optimize their own interests This means that they will choose the investment location of which characteristics best fit the characteristics of their business Therefore, within the scope of the thesis, the authors will study the suitability of EZs with the characteristics of enterprises investing in EZ, thus clarifying the characteristics of "target customers" in EZ Previous studies have not addressed these issues From this review, the author also found that up to date, no research in Vietnam has quantified the influence of factors affecting the decision of investors in EZ Therefore, the topic of doctoral thesis on economic "Factors affecting investment decisions of enterprises in economic zones: Nghi Son economic zone, Thanh Hoa province" is a significant study in terms of theory and practice in the current context in Vietnam Objectives and Research Questions The dissertation focuses on the factors influencing investment decisions of Vietnamese enterprises in the economic zone based on the case study in Nghi Son EZ Based on the results of general research and the results of practical research in Nghi Son EZ, the dissertation will provide the basis for proposing solutions to attract investment in EZ 3 The topic is clarified by the following research questions: (1) What are the theoretical factors influencing the investment decision of enterprises in EZ? Which theories explain the investment decision of enterprises in EZ? (2) In the Vietnamese context, what are the factors influencing the investment decision of enterprises in EZ? How these factors affect the investment decision of the enterprise in EZ? (3) Based on empirical results, what should be done to further attract enterprises' investment in economic zones in Vietnam? Subjects and scope of research Research subjects: Influence of factors on investment decisions of enterprises in economic zones Research scope Space: The thesis will study the development situation of the economic zone in Vietnam and then focus on the case of Nghi Son economic zone, Thanh Hoa province At the enterprise level, the thesis examines enterprises who have invested in Nghi Son economic zone and enterprises have not invested in Nghi Son economic zone in Thanh Hoa area Time: The thesis will use secondary data collected from 2006-2015 Primary data collected through questionnaire survey from August to November 2016 Content: Currently, Vietnam has two models of economic zones are coastal economic zone and border gate economic zone, in addition industrial parks and export processing zones However, this thesis only studies coastal economic zones (abbreviated as EZ) New contributions of the thesis * Theoretical and practical contributions Firstly, based on the study of local marketing, the thesis identified two groups of factors that affect the business owners’ investment decisions into economic zones such as internal factors (characteristics of enterprises, characteristics of business owners) and external factors (economy, social conditions, political and local regulations, and technology) Secondly, this study found out that the internal factors play an important role in the investment decision of business doers into economic zones Specifically, the finding from the regression analysis described the characteristics of target customers investing in EZ as medium and large scale enterprises of various categories: (i) heavy industry, mining; (ii) Supply and treatment of water and waste, (iii) Transportation services, seaports and maritime services; enterprises engaged in export activities; foreign companies and the businesses the owners of which earned bachelor degree or post graduate degree This "customer group” has higher investment probabilities than the others Thirdly, the study also reexamined a number of hypotheses and outlined the factors that affect the investment decision of the business doers in the following order: (1) Competitive input costs; (2) preferential rights; (3) local institutions; (4) Geographic location Infrastructure and human resources inside and outside the EZ not differ significantly so there is no correlation between them Factors that have the opposite effect are mass media and living environment Outside media and environment are considered to be better than those inside the EZ, therefore changes are needed * Findings and recommendations Based on the findings from data analysis, the thesis proposed three solutions used to attract investors into EZs: Firstly, the solutions for enterprises in EZs including: (1) Enterprises should take advantage of EZ to develop suitable industries and sectors; (2) It is important to establish associations of enterprises inside each EZ to support each other; (3) Creating cluster linkages for businesses in the economic zone Secondly, the solution groups for EZ management boards including: (1) Identifying the characteristics of "target customers" investing in the Economic Zone and attract them; (2) Identifying the advantages to develop a model of specific development for each economic zone; (3) Continuing administrative reforms to create favorable conditions for attracting investment and development of businesses.(4) Promoting brand image for economic zones Thirdly, it is to improve the attractiveness of the EZ to appeal investment firms including: (1) Completing the policy framework for the Economic Zone and building up typical Special Economic Zones with breakthrough to attract investment enterprises; (2) Diversifying the method and increasing the attractiveness of investment capital to build the infrastructure system for the economic zone; (3) Training human resources to meet the firms’ practical needs Structure of the thesis Research on Factors Affecting Investment Decision of Enterprises in Economic Zones: The case of Nghi Son Economic Zone, Thanh Hoa is composed of four main chapters: Chapter 1: Theory and overview of investment decision of enterprises in economic zones Chapter 2: Research Methods Chapter 3: Results of research on factors influencing investment decision of enterprises in economic zone Chapter 4: Some solutions to attract investment of enterprises in economic zone CHAPTER THEORETICAL BACKGROUND AND OVERVIEW OF INVESTMENT DECISIONS OF ENTERPRISES INTO ECONOMIC ZONES 1.1 Overview of the economic zone 1.1.1 Definition of Economic Zone Special economic zones (SEZs) are "a property legalized by commercial laws such as tariffs, quotas, or other obligations to the rest of the country" (UNIDO, 2015) In Vietnam, according to the Decree No 29/2008 / ND-CP, "The economic zone is an area with a separate economic space with an investment and business environment that is particularly favorable for investors Defining geographical boundaries, established according to the conditions, order and procedures prescribed by the Government " According to the author, "The economic zone is a separate economic space with the rest of the country with infrastructure and management mechanisms conducive to the development of enterprises." 1.1.2 Economic zone models Economic zones are now established and operating in developed and developing countries including the former socialist countries such as the former Soviet Union, Central and Eastern Europe The number of these zones has grown rapidly in Asia, Central America and the Caribbean depending on the conditions of infrastructure, development orientations and policies of the developed economic zone with the following forms: - International cities - Special economic zones (SEZs) - Free trade zones (FTZ) - Free Port (FT) - Open Economic Zone: Vietnam's open economic zones are in this state In Vietnam, open economic zones are developed in two types: + The border gate economic zone is a defined economic space in association with the international border gate or the main border gate of the country + The coastal economic zone is a definite economic space in association with seaports and the preferential mechanisms and policies, which are applied to encourage the development Within this thesis, the researcher only research on coastal economic zones 1.1.3 The role of the Economic Zone in socio-economic development Today, economic zones in the world are quite diverse in terms of type and target However, regardless of the model or time of establishment, even the reason for the foundation, the economic zones show their role through the following key aspects: - To raise the attractiveness of investment capital, especially foreign direct investment - Contribe to economic restructuring - Create jobs, raising incomes for the population - Contribute to the improvement of socio-economic policies - Contribute to raise the level of technology in production - Promote the development of technical infrastructure and social infrastructure 1.2 Overview of enterprises' investment in economic zones 1.2.1 Investment and investment decision In the broad sense, Sharpe et al (1999) argue that "investment is a sacrifice of certainty in the present to gain value (possibly uncertain) in the future" From an economic perspective, "Investment is the process of using resources over a specified period of time to achieve results or a set of defined objectives in a given socioeconomic context" (Tu Quang Phuong, 2013) A management decision is the creative act of the manager to determine the program and the nature of the organization's activity to address a mature issue, based on an understanding of the motive rules of the organization, the system of governance and the analysis of the information of that system (Stoner and Wankel, 1987) From a marketing perspective, investors are also local customers, so knowing the factors that influence the investment decisions of the business helps policy makers to develop suitable policies, operations for influencing investment decisions of enterprises 1.2.2 Investment decision theory 1.2.2.1 Optical theory - OLI model Dunning's eclectic theory (1997) suggests that there are three groups of factors that influence the investment decision, also called the OLI model: (i) Ownership advantages; (ii) regional advantage and (iii) domestic advantage Developed on the basis of Dunning's (1997) theory, Gilomre, Donnel, and Cummins (2003) argued that the following factors influenced the selection of investment markets: - Knowledge and experience of markets - Size and growth of the market - Government views and financial incentives - Economic policy inflation, tax rates and tax structure - Resources - Technology - Political stability Based on the OLI model, Phung Xuan Nha (2001) was divided into two groups of Pull-Push factors in investment The eclectic theory has argued convincingly why international investors choose a market/ country for investment However, these are in-depth studies of foreign investment, so factors are often considered in terms of a country such as the political situation, the level of science and technology In this, thesis, the author will inherit and apply this theory in the conditions of Vietnam and in the area of economic zones This study will inherit the scale of government incentives, infrastructure factors, geographic location, local human resources, etc of the Vietnam economic zone 2.2.1.2 Institutional theory and investment environment Institutions are "human-induced constraints designed to structure human interactions" (North, 2002) Institutional research is quite common in Vietnam, which is the Provincial Competitiveness Index (PCI) Institutional theories and PCI indicators have profoundly studied the "soft" factors that affect the investment decision of the business However, these theories not address hard factors such as geographical location, infrastructure, etc The scale of these soft factors will be referred to and applied to the preferential policy factor Local institutions within the framework of this thesis 2.2.1.3 The rational choice theory 7 Rational choice theory is a framework for understanding and often formally modeling economic and social behavior These options are selected on the basis of the assumption that organizations and individuals have sufficient information and they also choose the option they prefer Considering from an enterprise perspective, the investment decision of an enterprise to EZ is ultimately a decision on the location of the investment Businesses will prefer to choose the options suitable for their business characteristics In addition, when making their decisions, businesses will prioritize options to maximize profits In the case where an enterprise selects an investment location, the enterprise will consider alternatives to maximize its benefits That is, the company will choose the location where the investment can reach customers (increase sales) or where there are more preferential policies, cheaper space rent, transport costs, labor and materials and less formal expenses (reduced costs) 2.2.1.4 Theory of Local Marketing / Regional Marketing According to Kotler (2002), local marketing is a set of locally-made programs to improve competitiveness and economic development Marketing programs are designed to give localities differentiated "artificial" and not natural factors such as geographic location, natural resources Figure 2.1: The levels of place marketing 1.3 Identify the factors affecting the decision to invest in EZ On the basis of eclectic theory, institutional theory, optimal selection theory, especially local marketing theory, and an overview of the factors influencing investment decisions, it can divide the elements that influence to the investment decisions of enterprises into two groups of factors (inside and outside the enterprise): * Factors inside the business According to local marketing theory, the main investor is the customer Therefore, in order to have effective investment policies, policymakers must also understand their customers as a basis for making effective and targeted investment measures Factors within the enterprise are the factors that characterize the target customer (investor), including: (i) characteristics of the business; (ii) Characteristics of the business owner * Factors outside the business External factors affecting investment decisions are discussed in Alam and Stafford (1985); Hodgkinson (1989); Morgan, (1987, 1992); Dunning (1997); Kotler (2002); Hoskisson (1999); Gilmore (2003); UNIDO (2015); Le Hoang Ba Huyen (2013); Pham Van Nam (2010); Dinh Phi Tiger (2012); Nguyen Dinh Tho & Nguyen Mai Trang (2008) they are infrastructure, geographical location, preferential policies, local institutions, human resources In addition, in terms of local marketing (Figure 1.1), external factors are (i) infrastructure; (ii) attractive features; (iii) local impression and quality of life and (iv) human On the basis of this model, external factors are developed into eight groups of factors: Table 1.1: Development of factors based on the marketing mix tool TT Marketing Mix Development of factors Product Infrastructure Geographic location Incentives Human Resource Living environment Price Input costs Place Local institutions Promotion Promotion Source: author’s model Source: Kotler et al, 2002 In local marketing, a locality is defined as a geographic area delimited by the delimitation of administrative boundaries or natural terrain The locality can be a commune, a district, a province, a region, a country or an area (Philip Kotler, 2002) Thus, Vietnamese economic zones with clear geographic boundaries and their own preferential policies may adopt local marketing perspectives to improve themselves in the perspective of their clients In terms of local marketing, an investor is also a target group of a local or a geographic area In this thesis, the author will use regional and local marketing perspectives to study the factors influencing the investment decision of the business in the EZ, thus establishing the basis appropriate investment book 9 CHAPTER 2: RESEARCH METHODS 2.1 Research Process The dissertation uses the combination of primary and secondary data in qualitative and quantitative research Prior to qualitative and quantitative research, the author conducted a preliminary study using secondary data to describe the site and to evaluate trends Qualitative research was conducted as a basis for modeling and supplementing, explaining results from quantitative data Quantitative research evaluates the reliability of the scale and tests hypotheses The results of the study will be the basis for evaluating the results and proposing solutions 10 for variables Determine the content of the Primary scale question, decide the type of question and answer Step Develop and adjust the Complete the questionnaire Primary questionnaire questionnaire Step Survey, test and adjust Adjust the questionnaire to Complete the questionnaire suit the interviewee (if questionnaire necessary) Source: Synthesizer 2.3.2 Research model and hypothesis Step Develop the questions * Research model Enterprises’ characteristics Business owner’s characteristics Infrastructure Geographic location Incentives Investment decision to EZs Input costs 2.2 Qualitative research Qualitative research is a broad category that encompasses a wide range including theoretical research, case studies, anthropological studies, and action research There are various methods of data collection: interviews, group discussions, case studies, observation (Nguyen Van Thang, 2014) To conduct qualitative research in this thesis, the author uses the direct interview method for firms and expert methods In-depth interviews were applied to firms The author conducted 15 interviews with groups: (i) 05 enterprises outside the EZ; (ii) 05 enterprises are located in the Economic Zone and (iii) 05 enterprises have registered to invest in the Economic Zone without further investment 2.3 Quantitative research 2.3.1 Construct survey sheets 2.3.1.1 Process of survey formulation In order to conduct quantitative research, the survey form has been developed to collect data through the construction process as follows: Table 2.1: Process of survey formulation Order Process Target Results Step General research Identify the data and the Define variables method of data collection and define scales Local institutions Living environment Promotion Human resource Picture 2.1: Research model of influence factors of investment decision to EZs Source: proposed by the authors * Research hypothesis H1: The characteristics of the enterprises positively affect the enterprises’ investment decision to economic zones H2: The characteristics of the business owner positively affect the enterprises’ investment decision to the economic zone H3: The infrastructures of the economic zone positively affect the enterprises’ investment decision to the economic zone H4: The geographic location of the economic zone positively affects the enterprises’ investment decision to the economic zone 11 12 H5: Incentives positively affect the enterprises’ investment decision to the economic zone H6: Local living environment positively affect the enterprises’ investment decision to the economic zone H7: Competitive input costs positively affect the enterprises’ investment decision to the economic zone H8: Local institutions positively affect the enterprises’ investment decision to the economic zone H9: Promotion positively affects the enterprises’ investment decision to the economic zone H10: Local human resource positively affects the enterprises’ investment decision to the economic zone 2.3.3 Sampling and sampling methods 2.3.3.1 Sample size of the study: The overall survey size was 383 enterprises - For enterprises inside EZs: survey all 133 enterprises registered to invest in Nghi Son EZ - For enterprises outside EZs: within the scope of this study, the author only surveyed enterprises in Thanh Hoa province that were established from 2007 to the current time and prioritize the selection of medium and large enterprises, therefore the sample size of about 700 enterprises Sample survey with non-EZs enterprises was determined by the application of Slovin's formula (1960) as follows: n = N / (1 + Ne2) The overall sample size of the study was 700 investing firms (N = 700), e = 5% (reliability was at least 95%) Accordingly, the result of this stimula is nearly 254.4 Online calculations result on http://www.surveysystem.com/sscalc.htm is 248 businesses In order to facilitate the statistical work, the author selected 250 questionnaires 2.3.3.2 Sampling method The thesis has investigated 385 enterprises Within the EZ, the thesis surveyed 133 enterprises registered to invest in EZ For enterprises outside the economic zone, the thesis selected 250 enterprises by the method of random sampling with convenient norms to ensure the representation according to geographical scope and type of enterprises 2.3.4 Data Analysis Methods 2.3.4.1 Import and manage data The data entered and coded ensure scientific principles and avoid duplication 2.3.4.2 Verification of the scale Scale reliability was measured using the Cronbach alpha reliability coefficient and the exploratory factor analysis using SPSS 20 processing software to eliminate unresponsive observational variables based on Reliability standards 2.3.4.3 Exploratory Factor Analysis (EFA) Exploratory factor analysis is a statistical analysis method used to abbreviate a set of related observational variables into a smaller set of variables that are more meaningful but still contain most of the information of initial training (Hair et al., 1998) 2.3.4.4 Multivariate regression analysis The regression analysis is performed through the following steps: Step 1: Check the correlation between the independent variables and the dependent variable through the correlation matrix Step 2: Estimation model The decision to invest in EZ is the binary variable (Y = or Y = 1) Dependent variable Y = if the surveyed enterprise has invested in EZs; and Y = if the enterprises in the survey sample not invest in EZs Appropriate estimation models for this case are Logit and Probit models Assumption of error follows the standard rule of et ~ N (µ, σ2), the thesis selects the Probit model to study the impact of factors on investment decision in EZ in Nghi Son EZ The Probit model is described as follows: Pro (Y = 1/X , X , X , X ) = Φ( β + β1 X + β X + + β10 X 10 + u) After estimating the parameters in the above model, the thesis calculates the marginal impact to measure the impact of factors affecting the probability of enterprises investing in Nghi Son EZ The determinants of probability influence are calculated through boundary effects: ∂Prob(Y = Z) ∂Φ( β + β1 X + β X + + β10 X 10 + u) ∂Y = = ∂Y ∂Xi ∂Xi Where Z = (X1, X2, X10) and the estimation parameters and the independent variables are explained in the section above Estimated results are used to calculate the marginal impact of independent variables on the probability of enterprises investing in EZ Step 3: Check for violations of regression assumptions 13 14 CHAPTER RESULTS OF RESEARCH OF FACTORS AFFECTING TO INVESTMENT DECISIONS OF ENTERPRISES IN ECONOMIC ZONES 3.1 The formation and development of Vietnam EZs 3.1.1 Formation of EZs With the natural characteristics favorable for marine economic development and the need to build new economic models, in 2003, the Government decided to establish the first coastal economic zone, that is Chu Lai EZ By 2015, 18 economic zones will be established and 16 economic zones has been put into operation Table 3.1: List of Vietnam Economic Zones No Economic Zones Province/ City Foundation Chu Lai Dung Quat Van Phong Nhon Hoi Nghi Son Vung Ang Chan May- Lang Co Phu Quoc Van Đon Đong Nam Đinh vu- Cat Hai Hon La Nam Phu Yen Đinh An Nam Can Đong Nam Tổng Quang Nam Quang Ngai Khanh Hoa Binh Đinh Thanh Hoa Ha Tinh Thua Thien Hue Kien Giang Quang Ninh Nghe An Hai Phong Quang Binh Phu Yen Tra Vinh Ca Mau Quang Tri 10 11 12 13 14 15 16 Square (ha) 2003 2005 2005 2005 2006 2006 2006 32.040 45.332 149.550 12.000 18611.8 22.781 27.108 2007 2007 2007 2008 2008 2008 2009 2011 2015 58.923 217.133 400.000 22.541 10.000 20.730 15.403 10.802 23.792 682.982 Population Estimated 2014 population to (people) 2020 (people) 241.844 383.777 330.000 395.000 238.000 260.000 84.000 155.000 150.000 200.000 54.049 59.200 38.890 90.000 109.000 42.100 150.000 106.823 44.000 116.000 161.000 34.496 76.919 1.900.202 380.000 150.000 250.000 310.000 45.000 180.000 206.000 45.000 83.683 3.108.977 Source: Management Department of Economic Zones, Ministry of Planning and Investment After more than 10 years since the first Vietnam Economic Zone was born, economic zones increasingly confirmed their role in the process of socio-economic development of the country and achieved initially encouraging results To 2015, economic zones in the country attract 1,208 projects with a total investment capital of 1,531 trillion dong Of which, there have 311 FDI projects with total investment of more than 40.4 billion USD and 897 domestic investment projects with total investment capital of 651 thousand billion VND (EZ Department, 2016) 3.2 Results of statistical research describe factors influencing investment decisions in Nghi Son EZ 3.2.1 Field site characteristics Nghi Son economic zone in Thanh Hoa province was established in 2006 with a total area of 18,611.8 Development objective of Nghi Son EZ is to become a multi-sectoral, multi-sectoral economic zone with a focus on heavy industry and basic industry In June 2015, the Prime Minister issued a decision to adjust Nghi Son EZ to 106,000 hectares After 10 years of development and development, Nghi Son has developed quite well such as: About domestic investment: From the establishment of Nghi Son EZ to the end of 2015, 141 projects have registered capital of about 97.094 trillion dong and realized capital of 42.9 trillion dong On attracting foreign investment: From the establishment of Nghi Son EZ to the end of 2015, 11 FDI projects have been registered with a registered capital of US $ 12,215 million and implemented capital of US $ 6,756 million 3.2.2 Analyze the current status of factors influencing the investment decision of enterprises in Nghi Son EZ 3.2.2.1 Factors that belong to the business From the assessment of the factors within the dissertation business, it is possible to describe the "target customers" in the local marketing strategy of the economic zone as follows: Foreign investors (FDI enterprises) are often large investors, strategic and orientation for the development of the economic zone - For domestic enterprises, the majority shareholding companies (87%) are majority shareholding - Large enterprises tend to invest in economic zones with 11 times higher than the national average (34.7%) - In the field of investment, the processing industry enterprises and service enterprises are the majority in terms of quantity, however, heavy industry and petrochemical enterprises account for overwhelming proportions of investment capital 3.1.2.2 Factors outside the enterprise Research on external factors affecting the investment decision of enterprises in EZ is the marketing mix factors of local marketing to meet the needs of "target customers", from which Encourage them to invest in the Economic Zone (1) Infrastructure Being one of the five key coastal economic zones of the country, Nghi Son EZ has received the attention of the Government, Ministries and central agencies to prioritize capital to invest in important and essential infrastructure works In the 20112015 periods, VND 2,682 billion was allocated for 41 projects, of which 13 will be transferred from the previous phase and 28 will be started The total capital supported by the central government from its establishment till the end of 2015 is VND 3,707 billion (2) Geographical location Located in the southern part of Thanh Hoa province, 200 km far from Ha Noi capital, there are national roads and railways running through, with deep-water seaports for vessels of up to 50,000 DWT capacity Nghi Sơn is the southern point of the Northern key economic region, and is the bridge between the North and the Central, connecting with the Southern Laos and Northeast Thailand This is a favorable factor for domestic and regional transport to facilitate trade for enterprises in the economic zone (3) Preferential policies 15 16 Investors in the EZ would enjoy the highest preferential policies in accordance with the regulations of the State, enjoying a favorable and favorable investment environment for production and business (4) Input costs In order to attract investment from enterprises, the EZ Management Board also determined to have measures to reduce input costs for enterprises Especially, focus on the content suitable for businesses to reduce costs (5) Institutional characteristics of EZ The model, mechanism and function of State management of Nghi Son EZ is similar to that of Vietnam EZs which are transferred from the "authorization" mechanism to the "decentralization and direct assignment" mechanism (Ministry of Planning and Investment, 2012) However, the EZs not have their own institutions but are still managed by many Ministries, branches and Provincial People's Committees, especially the policies and management mechanisms of EZs are being regulated by the same regulations with IP, EPZ (6) Habitat The survey in Nghi Son EZ shows that EZs are in the construction phase so their living environment is still inadequate such as: high dust concentration; incompleted schools and health stations; without the entertainment place Therefore, it is necessary to improve living environment in the new economic zone (7) Communication To improve the efficiency of communication activities to attract investment, Thanh Hoa province has directed the promotion of the potential and advantages of EZs and IPs on a number of prestigious and prestigious international media channels; to coordinate with the Vietnamese embassies in foreign countries and investment consultancy organizations; To formulate annual investment promotion programs and plans and lists of projects calling for investment, which shall serve as basis for implementation (8) Human resources Thanh Hoa is the third largest population in the country (after Hanoi and Ho Chi Minh City) Thanh Hoa is in the period of "golden" population with favorable opportunities for socio-economic development Although the level of technical expertise of the labor force in Thanh Hoa has been raised considerably, there are still many inadequacies in terms of quantity, quality and structure 3.3 Experimental results of factors influencing investment decision of enterprises in EZ 3.3.1 Sample study Corrected Item-Total Correlation > 0.3, excepting for two variables ht2 and dl5 (Corrected Item-Total Correlation 50% Source: Analysis results from the author's research data The KMO and Bartlett's Test results in the above table show that this database is perfectly suitable because the Kaiser-Meyer-Olkin Measure of Sampling Adequacy is 0.816 (ranging from 0.5 to 1) with a statistical significance of 99% (Sig = 0.000