La nguyenthithuyvan sum

INTRODUCTION Rationale Industrialization and modernization are the indispensable development trend of all nations, especially developing countries such as Vietnam Industrialization and modernization aim at achieving a comprehensive social development of economic, society and environmental with a high economic growth and economic restructuring towards reducing the proportion of agriculture and increasing the export of industrial products Up to now, many countries have completed industrialization and they are moving towards a modern economy - the knowledge economy However, there are many countries, including Vietnam, are in the process of implementing industrialization and modernization Derived from reality of 30 years of national renewal, the Party and State have identified industrialization and modernization as the right way to leave the country out of poverty and backward Therefore, the study of (internal and external) resources to implement industrialization and modernization is very necessary Many empirical studies show that foreign direct investment (FDI) plays an important role on the process of industrialization and modernization in countries, especially in developing countries such as Vietnam through positive impact in economic growth, economic restructuring, labor restructuring, improve national scientific and technology level (Krongkaew, 1995, Phung Xuan Nha, 2000, Do Thi Thuy, 2001; Jomo, 2001; Peng, 2010) Are these conclusions in previous studies on the role of FDI in the process of industrialization and modernization still true in the context of a provincial level in a developing country? This study aims to test hypothesis about the impact of FDI on the process of industrialization and modernization in a provincial level at Thai Nguyen province Thai Nguyen is a province in the Northern Midlands and Mountains (NMM) of Vietnam, the cultural and educational center of the region In recent years, Thai Nguyen has promoted its internal strength together with utilizing external resources to boost the industrialization process, soon bringing Thai Nguyen into a modern industry province according to the Provincial Party Resolution During the local industrialization and modernization process since the re-establishment of the province in 1997, Thai Nguyen has achieved many achievements in all fields of economy, sociocultural and environmental protection Province’s economic growth has continuously increased through the development stages, the economic structuring towards increasing the proportion of industry and services, reducing the proportion of agriculture The labor force of Thai Nguyen province has also shifted positively, in which the proportion of agricultural labor tends to decrease and the proportion of industrial and service labor tends to increase The process of urbanization in the province took place at a fairly fast pace After nearly 20 years since the re-establishment of the province, the proportion of urban population in 2015 was 34.11%, increase 13.4% compared to the urban population in 1997 was 20.7% Together with the process of industrialization and modernization, the operation of attracting and using FDI in Thai Nguyen province has been increasingly effective The number of projects, the scale of the projects and the disbursement rate tend to increase, especially in recent years FDI inflows to the province are concentrated in the industry, accounting for 98.9% of registered capital and 99.72% of performing capital, contributing to boosting the industry and other economic sectors and change the appearance of Thai Nguyen province towards modernization Evidence from empirical studies shows the positive impact of FDI and the FDI sector on Vietnam's industrialization process However, the debate on the impact of FDI on industrialization or modernization as the basis for FDI attraction remains unanswered The empirical results on the relationship between FDI and industrialization, especially the impact of FDI on the industrialization process, are aimed at facilitating the FDI management and attracting, further enhancing the contribution of FDI to industrialization, speeding up the pace of industrialization at the provincial level such as Thai Nguyen is an urgent requirement for both research and practical management Thus, the author selected the topic "Study the impact of foreign direct investment on industrialization in Thai Nguyen province" to study the impact of FDI on Thai Nguyen industrialization, then propose policy solutions to mobilize and efficiently use FDI capital in association with accelerating the process of industrialization and modernization of the province Research objective and research questions 2.1 Research objective The general objective of this dissertation is to study the impacts of FDI on industrialization in Thai Nguyen province Based on the results of research, recommendations are proposed to promote the industrialization process in Thai Nguyen province in the future The specific objectives of the dissertation are: - Overview of theoretical and empirical studies on industrialization and the impact of FDI on industrialization at the national and local levels, thereby identifying criteria and specifications for industrialization at provincial level local to use in this study; - Systematize, explain and implement theoretical issues on FDI, industrialization and the impact of FDI on industrialization; - Analyze the status of FDI, the process of industrialization and the role of FDI in industrialization in Thai Nguyen province; - Analyze the impact of FDI on Thai Nguyen industrialization; - Propose recommendations to enhance the role of FDI in order to promote the industrialization process in Thai Nguyen province 2.2 Research questions To achieve the above objectives, the dissertation will focus on following research questions: - How is industrialization measured? - In theory, how does FDI affect the industrialization process? - What is the situation of FDI and industrialization in Thai Nguyen province? - How is the relationship between FDI and industrialization in Thai Nguyen province? What is the impact of FDI on industrialization in Thai Nguyen in the period 1995-2015? - What are recommendations to enhance the roles of FDI to promote industrialization in Thai Nguyen province in the future? Research subject and scope 3.1 Research subject The main subject of this dissertation is FDI, industrialization and the impact of FDI on the industrialization process in a provincial level Industrialization is measured by a system of indicators, specification, especially the “industrialization index” reflecting the aspects of development about economic, social and environmental 3.2 Research scope - Scope of space: the dissertation is conducted to research the impact of FDI on industrialization in Thai Nguyen province, Vietnam - Scope of time: data and documents were analyzed to clarify the impact of FDI on Thai Nguyen industrialization in the period of 1995 2015 - Scope of content: the dissertation analyzes the situation of FDI activities, industrialization process and the impact of FDI on Thai Nguyen industrialization, in which focus on the role of FDI in industrialization process through analyzing the role of FDI in basic indicators to measure industrialization Significance of the dissertation 4.1 Significance in theory - The dissertation explained and implemented theoretical issues on FDI, industrialization and the impact of FDI on industrialization at a provincial level local - The results of the dissertation contribute to providing empirical evidence on the impact of FDI on industrialization at a provincial level local in a developing country 4.2 Significance in practice - The dissertation is a valuable scientific work that will be a useful reference for PhD candidate, graduate students and readers; - The research results of the thesis will be the basis to build the development strategies of socio-economic in general, strategies and policies to attract and use FDI in the process of industrialization in Thai Nguyen province and other cities, provinces in the country Structure of the research Beside the introduction, conclusion and references, the dissertation includes chapters as the following: Chapter 1: Literature review related to topic and research methodology Chapter 2: Theories background on the impact of FDI on industrialization Chapter 3: The situation of FDI and industrialization in Thai Nguyen province Chapter 4: The impact of FDI on Thai Nguyen’s industrialization Chapter 5: Solutions to improve the role of FDI in industrialization of Thai Nguyen province CHAPTER 1: LITERATURE REVIEW RELATED TO THE TOPIC AND RESEARCH METHODOLOGY 1.1 Literature review related to the topic 1.1.1 Researches on industrialization and measuring industrialization 1.1.1.1 Researches on interlocutory of industrialization 1.1.1.2 Researches on evaluation criteria of industrialization at the national level Based on the characteristics of industrialization, the authors Ngo Thuy Loi and Nguyen Quynh Hoa (2014) propose to use the "industrialization index" to assess the industrialization process in Vietnam This index is calculated by the method of simple average of the partial industrialization indexes 1.1.1.3 Researches on criteria measuring industrialization at local level 1.1.2 Researches on impact of FDI on industrialization 1.1.3 The “gaps” in literature review There have been a lot of international and Vietnamese theoretical and empirical studies on industrialization, FDI and the impact of FDI on industrialization at the national as well as provincial level Researches on the interlocutory of industrialization and measure criteria of industrialization are quite adequate and consistent with current trends However, there are very few studies using a common index – industrialization index to measure the process of industrialization, especially at the provincial level Therefore, studies on the impact of FDI on industrialization only analyze the individual effects of FDI on one or some indicators of industrialization So far, there is no research conducted to assess the impact of FDI on industrialization through evaluating the impact of FDI on the industrialization index at provincial level local in Vietnam Conclusions in the literature review also show that FDI has impact on one or several indicators of industrialization In contrast, there are few studies answering the question of whether industrialization contributes to attracting and effectively using FDI In addition, previous studies have mainly used qualitative analysis to characterize the role, the negative aspects of FDI attraction associated with industrialization This research will use a combination of socioeconomic indicators and especially use industrialization index to measure and assess performing level of industrialization at a provincial level local The dissertation also uses quantitative methods such as causal analysis to clarify the relationship between FDI and industrialization, multivariate regression analysis to measure the impact of FDI on many basic industrialization indicators, especially industrialization index The conclusions drawn from this dissertation have both theoretical and practical implications CHAPTER 2: THEORIES BACKGROUND ON THE IMPACT OF FDI ON INDUSTRIALIZATION 1.2 Data and research methodology 2.1 Overview on foreign direct investment 2.1.1 Definition of foreign direct investment 2.1.2 Factors affecting FDI activities in a provincial level local 2.2 Industrialization 2.2.1 Conception of industrialization 2.2.2 Criteria to assess industrialization 2.2.2.1 Economic growth 2.2.2.2 Economic structure 2.2.2.3 Labor structure 1.2.1 Research data 2.2.2.4 Urbanization In this study, all estimates and hypotheses are based on provincial data in Thai Nguyen province during 1995 - 2015 1995 was the first year that FDI projects were implemented in the province 2.2.2.5 Industrialization index The industrialization index is determined basically on the calculation of component indexes The component index is determined by the ratio of the received value of each component indicator with the standard value of that index (for the indicators receiving values smaller than or equal to the standard value) The received value of each indicator is the actual value of a country or a local at a time (usually by year) The standard value of indicator is usually determined basically on international experience of countries or locals that have met the industrial standards, taking into account the actual conditions of the country or local where the research is conducted According to the research of Ngo Thang Loi and Nguyen Quynh Hoa (2014), the industrialization index is defined by calculating the arithmetic average (simple average) of the component indicators The author of the dissertation argues that it is possible to apply the weighted average method by using the Provincial Competitiveness Index (PCI) of Vietnam Chamber of Commerce and Industry (VCCI) to calculate the industrialization index 2.2.3 The factors affecting industrialization 1.2.2 Research methodology 1.2.2.1 Desk study method 1.2.2.2 Descriptive statistics method 1.2.2.3 Relational analysis method 1.2.2.4 Causal analysis method 1.2.2.5 Regression analysis methods 2.3 The impact of FDI on industrialization Table 3.1: The scale of FDI in Thai Nguyen province in the period 1995 – 2015 Year The number of licensed projects Registered capital (Million USD) Implemented capital (Million USD) The average scale per project (Million USD) Disbursement rate (%) CHAPTER 3: THE SITUATION OF FDI AND INDUSTRIALIZATION IN THAI NGUYEN PROVINCE 1995-2000 12 50,9 48,2 4,24 94,7 2001 3,40 0,33 1,70 9,71 3.1 Comparative advantages of Thai Nguyen in attracting FDI and implementing industrialization 2002 3,11 0,8 1,56 25,72 2003 4,60 4,16 2,30 90,43 2004 148,10 4,12 37,03 2,78 3.1.3 Human Resources 2005 6,20 10,58 6,20 170,65 3.1.4 Technological potential 2006 3,28 17,59 0,66 536,28 3.1.5 Local government 2007 117,45 77,21 19,58 65,74 3.2 The situation of FDI in Thai Nguyen province in the period 19952015 2008 3,86 40,28 1,93 1.043,52 2009 15,5 7,98 7,75 51,48 2010 2,9 20,28 0,97 699,31 2011 2,69 18,30 2,69 680,80 2012 20,65 8,52 4,13 41,25 2013 22 3.386,75 456,61 153,94 13,48 2014 23 3.163,18 1.052,64 137,53 33,28 2015 25 200,45 3.238,15 8,02 1.615,44 2.3.1 The impact of FDI on economic growth 2.3.2 The impact of FDI on economic and labor restructuring 2.3.3 The impact of FDI on urbanization process 3.1.1 Geo-economic location and natural resources 3.1.2 Economic potential 3.2.1 The result of attracting and using FDI in Thai Nguyen province 3.2.1.1 The scale of attracting and using FDI In 1995, the first FDI project in Thai Nguyen province was implemented with the implemented capital of $23.2 million The scale of Thai Nguyen's FDI in the period 1995 - 2015 is shown in Table 3.1 Table 3.1 shows that in the last years, from 2013 to 2015, the number of FDI projects that Thai Nguyen attracted was 70/117, accounting for 59.83% of the total number of projects in the period The scale of average FDI in the period of 2013 - 2015 is $ 96.43 million Tổng số 117 7.133,02 4.962,95 60,97 69,58 Source: Thai Nguyen provincial statistical yearbook 2015 and author’s calculation 10 3.2.1.2 Attracting and using FDI by form of investment FDI in Thai Nguyen province in the period 1995-2015 was implemented mainly by the form of 100% foreign capital associating with the foundation of economic organizations that are FDI enterprises 3.2.1.3 Attracting and using FDI by economic sectors FDI projects in Thai Nguyen mainly focus on processing and manufacturing industry, accounting for 80% the number of projects and 99% the scale of capital 3.2.1.4 Attracting and using FDI by principal investment partners By the end of 2015, Thai Nguyen has FDI partners investing in the province, Korea is the main FDI partner of Thai Nguyen province in many aspects 3.2.1.5 Attracting and using FDI by district/borough/city Although Thai Nguyen already has special preferential policies to attracting FDI in some mountainous district such as: Dinh Hoa, Vo Nhai… FDI still focuses on the cities, boroughs having favorable conditions in infrastructure, human resources… such as Thai Nguyen city, Song Cong city, Pho Yen district… 3.2.2 General assessment of FDI activities in Thai Nguyen province 3.2.2.1 The achievements 3.2.2.2 The limitations and the reasons (i) The amount of registered, implemented capital, the scale of project and disbursement rate have fluctuated over the years and have no specific trend (ii) FDI projects in Thai Nguyen mainly invest in the form of 100% capital, so benefit from FDI attracting is not as expected (iii) FDI partners in some developed countries have already invested in Thai Nguyen, despite of the fact that there is only one project performed, and there is no new investor from these countries The limitations in attracting FDI in Thai Nguyen province in recent time have subjective and objective causes Compared with some vicinity provinces as Vinh Phuc, Bac Ninh… Thai Nguyen’s geographical position is less favorable for investors in commodity circulation In addition, transportation infrastructure and infrastructure of industrial park has not developed synchronously Subjective causes are due to inadequate awareness of the necessity and role of FDI in the process of industrialization and modernization of a part of leading and civil servants of Thai Nguyen province Besides, some policies of Thai Nguyen have not really attracted investors in general, foreign investors in particular, that is: (i) A number of investment policies are still spread out, without investment focused, resulting in low investment efficiency; (ii) The one-stop stop mechanism has not properly promoted, causing troubles to investors; (iii) Planning is not well implemented, wasting time for investors in determining the location of investment, long time of land clearance 3.3 The situation of industrialization of Thai Nguyen Province 3.3.1 Economic growth 3.3.2 Economic restructuring 3.3.3 Labor restructuring 3.3.4 Urbanization 3.3.5 Industrialization index of Thai Nguyen province The results of calculating the industrialization index showed that the industrialization index of Thai Nguyen province reached 78.34% by the end of 2015, meaning that it reaches the late stage (the stage of development - basically becoming an industrial province) With the rapid development in recent years, Thai Nguyen may basically become an industrial province in the modern direction in short time 11 12 Unit Benchmark for completion of industrialization Achievement of Thai Nguyen Industrialization index Assessment of achievement of Thai Nguyen % ≤1 5,59 17,89 Stage Doctors 12 12 100,00 Complete stage year 75 73,3 97,73 Late stage % 15 5,9 39,33 Late stage 64,63 In the middle of stage 78,34 Late stage Table 3.7 Industrialization index of Thai Nguyen province in 2015 Indicators GDP/capita (Goods price) GDP/capita Index Structure of economic sectors by GDP - Agriculture – Forestry - Fishery - Industry – Construction - Trade – Service Structure of economic sectors index by GDP Labor structure - Agriculture – Forestry - Fishery - Industry – Construction - Trade – Service Index of labor structure by industry Structure of economic sectors index Rate of urbanization Unit Benchmark for completion of industrialization Achievement of Thai Nguyen Industrialization index USD 3282 1.993 60,73 % 60,73 % ≤ 15 16,9 88,76 % 46 - 47 50,0 100,08 % 33,1 38 - 39 % 85,97 94,09 Assessment of achievement of Thai Nguyen Population Early stage growth The number of Early stage doctors /10.000 people Average life expectancy Complete Percentage of stage students in total Complete population stage Complete stage ≤ 30 51,00 58,82 Early stage % ≥ 38 27,2 71,58 % ≥ 32 21,8 68,13 In the middle of stage Early stage % 66,18 Early stage % 80,13 Complete stage 68,20 Early stage > 50 34,11 13 (ii) FDI and economic growth have positive relationship; when FDI increases, economic growth also increases and vice versa (iii) FDI has a positive impact on economic restructuring process towards industrialization (iv) FDI promotes the labor restructuring process by sector and by economic sector in the right industrialization direction (v) FDI has positive and high correlated with urbanization process (vi) FDI has positive and high correlated with the industrialization index of Thai Nguyen province 4.3 Causal analysis of the relationship between FDI and industrialization in Thai Nguyen province 4.3.1 Unit root test The results of unit root test show that, beside the labor structure variable stopping at the original chain, the FDI chain, industrial output, GDP per capita, economic restructuring, urbanization and industrialization index are 1-order stationary time series This means that the first-order differential of time series in this study is the stationary chain The results of the unit root tests also show that the optimal latency for FDI variables, industry value added, GDP per capita, economic restructuring, urbanization and industrialization index is 4.3.2 Co-integration test The results of co-integration test show that: (i) There is a co-integration between FDI and industrial value added (industrial GDP), between FDI and industrialization index (ii) There are two co-integrations between FDI and other industrialization variables This test result demonstrates that the relationship between FDI and industrialization has a linear relationship and reaches stationary state 4.3.3 Causal test The results of Granger-Wald test in table 4.5 show that there is a causal relationship between FDI and industrialization variables In that, 15 Social index Industrialization Late stage index % % Indicators Source: Thai Nguyen provincial statistical yearbook 2015 and author’s calculation CHAPTER 4: THE IMPACT OF FDI ON THAI NGUYEN’S INDUSTRIALIZATION 4.1 The role of FDI in industrialization of Thai Nguyen province 4.1.1 The role of FDI in economic growth 4.1.2 The role of FDI in economic and labor restructuring 4.1.3 The role of FDI in urbanization process 4.2 Correlation analysis the relationship between FDI and industrialization in Thai Nguyen province The result of calculating the correlation coefficient between FDI and industrialization measurement variables shows that: (i) FDI and GDP of Thai Nguyen province have positive relationship and high correlation 14 FDI impacts all industrialization variables at a statistical significance level of 1% The results of two-stage Granger test show that FDI has impact on almost all industrialization measurement variables in long-term Table 4.5: The results of Granger test Granger- Wald Test FDI decide on economic growth Economic growth impacts on FDI FDI decides on the value added of industry Industry value added impacts on FDI FDI decides on economic restructuring Economic restructuring impacts on FDI FDI decides on labor restructing Labor restructing impacts on FDI FDI decides on urbanization Urbanization impacts on FDI FDI decides on industrialization Industrialization impacts on FDI 10,296*** (0,001) 0,9524 (0,329) 10,179*** (0,001) 0,1248 (0,724) 7,45*** (0,006) 0,0159 (0,900) 12,019*** (0,001) 7,603*** (0,006) 24,823*** (0,000) 4,7412** (0,029) 34, 277*** (0,000) 0, 5978 (0, 439) Two-stage Engle-Granger test Short term Long term 0,0157 0,0291* (0,065) (0,166) 0,0533* (0,081) 0,0417** (0,024) -3,054 (0,487) 0,3795 (0,181) -0,2825 (0,702) 0,1333 (0,436) 0,0024 (0,822) -14,2004 (0,305) -0,0008 (0 884) 15, 6006 (0, 374) 0,9523** (0,032) -0,0747 (0,671) 0,0135* (0,067) 16,1119 (0,317) 0,0064* (0, 066) -15,5897 (0,804) *** statistical significance level of 1% and ** at 5%, and * at 10% The number in parentheses is the value of p Source: Calculation of dissertation 16 (i) The estimated results show that 98.55% of the change in Thai 4.4 The impact of FDI on Thai Nguyen’s industrialization 4.4.1 Estimated model Nguyen's economic growth over the period was explained by the impact 4.4.2 Estimated result of FDI, domestic capital, and labor Specifically, when the FDI increased Table 4.6: Estimated result of the impact of FDI on industrialization 1%, the GDP per capita in Thai Nguyen increased 0.0288% in the statistically significant 5% measurement variables of Thai Nguyen province Economic growth (GDP/capita) ** FDI Economic restructuring (The pace of economic restructuring) ** 0,0288 0,7605 (0,036) (0,029) 4,6136 Labor restructuring (The pace of labor restructuring) *** 2,7600 (0,002) Urbanization (Urban population) (ii) Estimated results in Table 4.6 show that 96.14% of the change Industrialization index 0,0153 (0,025) -9*** 1,96.10 FDI increased 1%, the economic restructure increased 0.7605% (0,001) -8** Domestic capital - 0,0523 1,08.10 (0,455) (0,017) Labor 3,7724*** 23,6807** 0,8404*** 5,46.10-7** (0,000) (0,014) (0,000) (0,029) (0,016) R-squared restructuring In which, the FDI increased million dong, the labor restructuring raised 2.76 percentage points change in urbanization variables is explained by the impact of the (0,002) 0,0077*** independent variables of the model: FDI, labor size and labor (0,003) restructuring Specifically, when FDI increased by 1%, urban population 0,0475** Economic integration Constant (iii) The estimated results show that 75.62% of the change in labor restructuring was explained by the impact of FDI and economic (iv) The results of the estimation also show that 96.76% of the 0,4147*** Labor restructuring effect of independent variables: FDI, domestic capital and labor In particular, FDI has a positive impact on economic restructuring and when ** ** Economic restructuring in the pace of economic restructuring of Thai Nguyen is explained by the increased by 0.0153% (0,017) (v) The estimated results of the impact of FDI on industrialization index showed that 97.99% changes in the industrialization index was -47,2498*** -380,306*** 5,1628*** 1,0297 0,1181 (0,000) (0,002) (0,009) (0,672) (0,308) 0,9855 0,9614 0,7562 0,9676 0,9799 *** statistical significance level of 1% ** at 5% The number in parentheses is the value of p Source: Regression results of the author Thus, the results of estimating the impact of FDI on the industrialization measurement variables in Table 4.6 show that: explained by the impact of FDI, domestic capital, labor and economic integration In particular, when FDI increased million, the industrialization index increased 1.96.10-9 percentage points 4.5 General assessment on the impact of FDI on Thai Nguyen’s industrialization 4.5.1 The achievements 4.5.2 The limitations and the reasons 17 18 Above analysis also indicates that industrialization process of the province in recent time having some limitations: - The contribution of FDI to growth is unbalanced among economic sectors, growth of service sector is low; - Economic restructuring by sectors and the development among sectors is unbalancing; - Unbalanced urbanization between districts / cities / towns in the province Attracting and using FDI in Thai Nguyen recently focused on some areas with advantages as one of the factors causing this situation Specifically as follow: (i) As FDI are mainly concentrated in industry, accounting for 99.72% of the total implemented FDI of the province (ii) FDI caused a trade deficit due to a sharp increase in imports of this sector (iii) Imbalance in FDI attraction among districts / cities / towns, leading to an increase in the development gap among districts in the province Limitations on the impact of FDI on the indicators of Thai Nguyen’s industrialization are due to subjective and objective reasons Objective reasons are due to the impact of political and economic instability in the world, limited resources to synchronously develop across sectors, different development advantages in each sector, each region have great influence of FDI on the industrialization indicators Subjective causes include inadequate awareness of the role of FDI in the industrialization process of a part of the managerial staff; policy mechanism are not strong enough to obligate investors as committed to initial business registration in sectors; investment incentives in some key sectors such as services, incentives in some difficult areas of the province are not really attractive; the low quality of human resources leads to low productivity; the weakness of domestic enterprises; the examination and issuance of investment certificates are not tight and are not fully complied with the planning; technical and social infrastructure have not met the requirements; the inspection, examination and supervision of the implementation of FDI projects is not regular, not really effective 19 20 CHAPTER 5: SOLUTIONS TO IMPROVE THE ROLE OF FDI IN INDUSTRIALIZATION OF THAI NGUYEN PROVINCE 5.1 Background to proposed solution 5.1.1 Orientation to attract and use FDI in Vietnam 5.1.1.1 Context of attracting and using FDI 5.1.1.2 Orientation to attract and use FDI 5.1.2 The country industrialization trend 5.1.3 Orientation of industrialization in Thai Nguyen province 5.1.3.1 Background of industrialization in Thai Nguyen province 5.1.3.2 Objectives, viewpoints of industrialization of Thai Nguyen province 5.1.3.3 Orientation of industrialization in Thai Nguyen province 5.1.4 Orientation to attract FDI to promote the industrialization process in Thai Nguyen province 5.1.4.1 FDI attraction in Thai Nguyen province 5.1.4.2 Orientation to attract and use FDI 5.2 Solutions to improve the role of FDI to promote Thai Nguyen’s industrialization First, improve the awareness, capacity and qualifications of the leaders, civil servants in Thai Nguyen about the need to attract FDI and the role of FDI in speeding up the province's industrialization Second, complete mechanisms and policies related to attracting and using FDI associated with the province's industrialization process Third, improve the quality of planning by sectors, regions, by economic sectors, planning industrial parks and industrial clusters in the province Fourth, complete technical and social infrastructure Fifth, continue the administrative reform in a simplified way, promote one-stop-shop mechanism, transparency of information and anticorruption in order to reduce informal expenses related to investment activities Sixth, improve the quality of human resources to meet the requirements of industries and fields requiring high quality human resources Seventh, improve the management of investment activities in the province to strengthen the coordination between departments, offices to avoid overlapping in the implementation process Eighth, concern for the promotion of investment, diversification of forms of investment promotion, promote post-investment support to attract and retain foreign investors Ninth, synchronously develop Thai Nguyen Urban System, creating momentum for FDI attraction, continued to upgrade urban areas in depth, accelerating the rate of urbanization Tenth, further strengthen the role of FDI in economic growth of the province Eleventh, further strengthen the role of FDI in sectoral economic restructuring by GDP and labor structure by sector Twelveth, international cooperate in the region and other localities throughout the country on attracting FDI and implementing the process of industrialization 21 22 An empirical analysis of the impact of FDI on Thai Nguyen's industrialization in the period 1995 - 2015 shows that FDI decides to industrialize in Thai Nguyen province In particular, FDI has a positive impact on economic growth, economic restructuring, labor structure and urbanization Especially, FDI has a decisive impact on the industrialization index and causal analysis indicates that this effect is in the long run Base on evaluating the achievements, limitations and causes in attracting FDI, industrialization and the impact of FDI on the process of industrialization in Thai Nguyen province in recent time; FDI attraction context; Orientation of industrialization in Vietnam and Thai Nguyen province, the author proposed solutions to enhance FDI attraction to ensure capital for industrialization and promote the industrialization process in Thai Nguyen province in the future Although the dissertation achieved the research objectives, the author recognizes that many aspects of the thesis need to be further researched and refined due to provincial data limitations, study time Firstly, the data used in the study was not enough for the observation as the theory had desired Secondly, the dissertation did not analyze the spillover effect of FDI on local enterprises in enhancing technology capacity, improve the localization rate of production and export products, the ability to associate enterprises of the province involved in the production and product supply chain globally Although the author has tried to collect sufficient data for the study, but due to geographical characteristics of the study area, the dissertation is inevitably limited The dissertation’s author wishes to be able to continue to study more about this issue in the coming time and look forward to the comments of scientists to complete the dissertation 23 CONCLUSION The dissertation describes the general picture of FDI and the industrialization process in Thai Nguyen province The results of the FDI situation analysis in Thai Nguyen province show that there have been many remarkable results, especially the prosperity in recent years The process of industrialization in Thai Nguyen province has been in the right direction, many targets have reached and exceeded the national average In addition to the achievements, FDI attraction and the industrialization process in Thai Nguyen province have also revealed constraints such as unstable FDI attraction, unbalance among sectors, although the industrialization moved in the right direction, the speed is still slow, unbalanced development among sectors and localities in the province