The effectiveness of ODA capital using and state financial management for foreign aid projects in the health sector ..... The achieved achievements and limitations in effectively using O
Research objectives
This study aims to analyse the reality of state financial management for foreign aid projects managed by the Ministry of Health that would be focus on factors impact to effectively using ODA capital and state financial management for foreign aid projects It proposes some solutions to help MOH leaders enhance management efficiency and increase an attractiveness of annual OAD investment capital in next period.
Research questions
In this study, we would find out the answers to following questions:
- How the state financial management for non-refundable ODA projects at MOH was conducted in the period of 2017-2021
- What factors impact to effectively using ODA capital and the state financial management for non-refundable ODA projects at MOH?
- What solutions are proposed to enhance the state financial management efficiency and increase an attractiveness of annual ODA investment capital at MOH in following time?
Research objects and scope
Based on the collected data in the period 2018 – 2023 from Ministry of Health However, the data of years 2022 and 2023 recorded with a number were zero because the Covid-19 epidemic has broken out in many countries and has greatly affected ODA capital Many donor countries faced significant fiscal pressures due to the economic impacts of the COVID-19 pandemic This led to some reductions or stagnation in ODA budgets, as governments had to prioritize
3 domestic spending for pandemic response and economic recovery efforts, the objects of the research is finding out the most important factor affecting on state financial management ồ ODA projects managed by the Ministry of Health and showing the distinctive characteristics of state financial management for foreign aid projects within Ministry of Health compared to other ministries.
Research’s contribution
Within the boundary of this thesis, base on evaluating the reality of state financial management for ODA projects managed by MOH, we proposed solutions to improve the state financial management efficiency and increase an attractiveness of annual ODA investment capital The research findings might be use for the MOH’s system in particular and for other Vietnamese sectors in general.
Research structure
Regardless of the introduction, conclusion, reference and appendix the thesis has four major parts as following
Chapter 1 Literature review and theories about the state financial management for using ODA capital in health sector
Chapter 3: The reality of state financial management for foreign aid projects managed by MOH and research resuluts
Chapter 4 : Discussion research results and recommendation to improve the state financial management efficiency and increase an attractiveness of annual OAD capital in MOH in the future
LITERATURE REVIEW AND THEORIES ABOUT STATE
Literature review
1.1.1 The international studies on effectiveness of managing and using ODA capital resources
Adèle Cassola, Prativa Baral et.al (2022) conducted a study to evaluate ODA funded foreigning mechanisms for global health and development research that is initiated in high-income countries Based on a document synthesis and interviews with research funders in ODA donor and recipient countries, they evaluated the performance of this funding approach across seven donor-country programs from five donor countries and examined the institutional design elements that increase its chances of advancing development goals and addressing global challenges Their findings showed that carefully designed programs provide a promising pathway to producing valuable and contextually relevant knowledge on global health and development issues To achieve these outcomes and ensure they benefit ODA- receiving countries, programs should focus on recipient-country priorities and absorptive capacity; translate research on global public goods into context- appropriate technologies; plan and monitor pathways to impact; structure equitable partnerships; strengthen individual and institutional capacity; and
5 emphasize knowledge mobilization They suggested governments should consider the potential of ODA-funded research programs to address gaps in their global health and development frameworks In the absence of concrete evidence of development impact, donor countries should consider making increases in ODA allocations for research additional to more direct investments that have demonstrated effectiveness in ODA-receiving countries [30]
E Chuke Nwude, Robinson O Ugwoke et.al (2020) investigated the effect of ODA foreigns and income per capita on health outcomes in developing countries Health outcome is proxied by life expectancy and under-5-mortality rate They indicated that ODA does not improve health outcome in developing countries, while income per capital significantly improves health outcome in developing countries The study reported that CO2 emission was not a significant determinant of health outcome in developing countries, but the prevalence of HIV and Immunization significantly determines health outcomes in developing countries More specifically the prevalence of HIV increases the under-5-mortality rate and decreases life expectancy; immunization increases life expectancy but decreases under-5-mortality rate It was equally revealed in the study that health outcome in Sub-Saharan Africa (SSA) does not significantly differ from health outcomes in other developing countries They equally reported that the effect of income per capita on health outcome in Sub-Saharan Africa countries is not significantly different from that of non-SSA countries The effect of official development assistant on health outcome in SSA was found to be significantly different from non-SSA countries The study reveals that the effect of ODA on life expectancy in SSA is less compared to its effect on non-SSA countries Similarly, the effect of ODA on under-5-mortality is higher in SSA countries as against other non-SSA countries [34]
Sangnim Lee, Aya Ishizuka et.al (2021) analyzed 68 health projects that were being implemented in Vietnam during December 2016 through Japanese public funding Her study aimed to map Japan’s publicly funded projects by
6 both ODA and other non-ODA public funds, and to describe the intervention areas Further, the policy implications for country-specific cooperation strategies were discussed She found that these 68 projects under 15 types of schemes were managed by seven different scheme-operating organizations and funded by five ministries Of these 44 (64.7%) were ODA and 24 (35.3%) were non-ODA projects Among the recategorized six building blocks of the health system, the largest proportion of projects was health service delivery (44%), followed by health workforces (25%), and health information systems (15%) Almost half the projects were implemented together with the central hospitals as Vietnamese counterparts, which suggests that this area was demonstrated by Japanese cooperation [39]
No synergetic effects of potential collaboration or harmonization among Japanese funded projects were captured Several Japanese-funded projects addressed a wide range of health issues across all six building blocks of the health system in Vietnam However, there is room for improvement in developing coordination and harmonization among the diversified Japanese projects Establishing a country-specific mechanism for strategic coordination across Japanese ministries’ schemes can yield efficient and effective development cooperation for health While Vietnam’s dependence on external funding is low, the importance of coordination across domestic actors of the donor countries can serve as an important lesson, especially in beneficiary countries with high external funding dependency
Xiaoxiao Jiang Kwete, Yemane Berhane et.al (2021) has developed and applied a new framework in their paper to analyze decision-making process for ODA) for healthcare sector in low-income and middle-income countries: a Best Fit Framework Synthesis study with primary data from Ethiopia, Nigeria and Tanzania The framework was developed based on 40 articles selected from
6860 distinct search records Twenty-one interviews were conducted in three case countries from 12 institutions Transcripts or meeting notes were analyzed
7 to identify common practices and specific challenges faced by each country They found that multiple stakeholders working around one national plan was the preferred approach used for priority setting in the countries studied They proposed priority setting process can be further strengthened through better use of analytical tools, such as the one described in our study, to enhance local ownership of priority setting for ODA and improve aid effectiveness [44]
Marlène Guillon and Jacky Mathonnat (2019) studied 345 health aid projects which were financed by China in Africa between 2006 and 2013 to evaluate the factors associated with Chinese health ODA to African countries She recognised that China favors countries with limited ability to finance health projects, Chinese health aid allocation was poorly related to direct health needs of African countries There was no evidence that Chinese health aid was directed to natural resources-rich countries while her results indicated the existence of an association between economic ties with China and the volume of Chinese health ODA received Their finding confirmed the idea that health aid might be used by China as part of its foreign policy since non-adherence to the one-China policy makes the receipt of Chinese health aid very unlikely [36] Sumi Jeong (2016) evaluated the impact of health ODA on the promotion of health in developing countries through an empirical analysis and compare the outcome with Korea’s health ODA strategies In doing so, this study contributes to the existing body of discussion on health aid effectiveness and provides implications for Korea’s future health ODA directions and strategies Infant mortality rate, under-five mortality rate, and life expectancy were used as outcome variables of health, and health ODA was used as the key explanatory variable Health ODA is dissected into smaller subsectors to analyze if a specific type of health ODA is more effective than others Fixed effects methodology is applied to estimate whether health ODA has positive effects on the three health outcomes in the sample of 131 countries over the period of 2002-2013 The study found that health ODA has a statistically significant and positive effect on target
8 health outcomes and basic health ODA such as basic health care and infectious disease control are more effective than other types of health assistance This supports the validity of the current strategy of health ODA in the international development cooperation where much stress is on increasing assistance to basic health On the other hand, Korea’s health ODA may need to revise the priority settings, as a large share of Korea’s health ODA investment is directed to health infrastructure than the sectors that were found effective in this study [41]
1.1.2 The Vietnamese studies on effectiveness of managing and using ODA capital resources
International organizations such as the World Bank, the United Nations (UN), the European Commission (EC) conducted annually research and assessments reports on ODA projects management and implementation in Vietnam [25] Their aim to identify general and specific problems that affected performing the programs and projects of 6 Development Banks and offers and recommendations Thereby, the actions have been taken to improve the institutional framework, legal and implementation procedures to execute programs and ODA projects were more effective The above studies have closely followed Vietnamese reality, giving good recommendations related to various aspects of attracting, managing and using ODA capital in the last years However, as the international papers mentioned above, these studies have not placed Vietnam in a new context when it becames a low midle income country and affected by many changes according to international donor regulations In particularly, recent research reports on international funding have not yet updated the fundamental changes in the State's ODA policy in recent years Linh Nguyen Da (2018) in his study on “Management and implementation models for foreign funding sources of the Ministry of Finance: reality and solutions” conducted analyzing the reality, comprehensively evaluate management models and implementing ODA projects mannaged by Ministry of Finance from 1993 to 2018 aim to point out the shortcomings and causes and propose solutions to improve the
9 efectiveness of management paradims and implementing ODA projects of MOF in future He found that although MOF has been established program management units to organize and implement ODA projects in recent years, however these projects have not achieved the desired maximum efficiency [25]
He pointed out an inefficient organizational structure, low quality of human reource or inconsistent implementation was one of the reasons for reducing the effectiveness of PMUs Furthermore, donors were changing ODA policy when Vietnam became a low middle-income country (LMIC) with opening new funding channels and the applying new aid approaches and models The study has proposed selecting criteria for a model of a specialze ODA project management unit suitable to the reality and requirements for innovation and management This model would enhance the efficency, initiative and responsibility of the specialized PMUs and improve projects' operational efficiency During project implementation, it would exploit, maximally using the domestic and international experts participating in projects, including short-term and long-term experts to ensure output's effectiveness in accordance with Vietnamese reality demand
Lam Chu Tung and Giap Nguyen Huu (2020) researched on thematic audit on managing and using ODA capital from 2015 to 2017 at MOH of the State Audit Specialized III They showed that beside the achieved results, auditing the management and use of ODA capital at MOH in recent years has some limitations such as a thematic audit outline on the management and use of ODA capital and foreign preferential loans in the period from 2015 to 2017 were still temporary The specific assignment for a survey team to make an audit plan still faced difficulties The audit plan was still limited in reflecting the specific characteristics of the audit object
Although the number of audits has increased, human resources are limited, so it was unable to deeply assess and answer pressing issues in public about negative manifestations in managing and using public financial and property
The research gaps and a necessary for further study
I reviewed both the international and domestic studies on managing and using OAD capital in social – economic growth, especially in health sector However, they are studied separately in different periods with different perspectives and research evaluations, which would lead to an evaluating disparately the effectiveness of using ODA capital There is not a study on state financial management for ODA projects in health sector from 2017-2021 in a new context of Vietnam when it was a low middle income country and impacted by fundamental changes in the providing aid policy of the international community and Vietnamese goverment goal of using preferential loans when ODA capital decreases, loans become more expensive This is a research gap for me to conduct a study on State financial management for foreign aid projects
13 managed by the Ministry of Health it would contribute on scientific theory and practical significance for making financial policy and organizing effectively use the health ODA capital of the donor community for Vietnam in the future
Research hypothesis about the factors affect on effectiveness using ODA capital and state financial management for foreign aid projects at Ministry of Health can be formulated as follows:
H1: The project’s financial capacity has positively impact on effectiveness using ODA capital and state financial management for foreign aid projects That means the higher/lower effectiveness using ODA capital and state financial management for foreign aid projects will be evaluated by the project’s financial capacity factor
H2: The competence of executive staff has positively impact on effectiveness using ODA capital and state financial management for foreign aid projects That means the higher/lower effectiveness using ODA capital and state financial management for foreign aid projects will be evaluated by the competence of executive staff factor
H3: The competence of construction contractor has positively impact on effectiveness using ODA capital and state financial management for foreign aid projects That means the higher/lower effectiveness using ODA capital and state financial management for foreign aid projects will be evaluated by the competence of construction contractor factor
The competence of executive staff
The competence of construction contractor
Effectiveness using ODA capital and state financial management for foreign aid projects at Ministry of Health H1
Overview of official development assistance (ODA)
1.3.1 Definition and characteristics of ODA
Official development assistance (ODA) is defined by the OECD as government aid that promotes and specifically targets the economic development and welfare of developing countries In other word, developed country governments, international organizations, intergovernmental or transnational organizations, (know as foreign donors) provide foreigns, loans and technical assistance to support economic development, ensure welfare and social security for developing countries
ODA has long repayment period (25-40 years), and long grace period (8-10 years) Examples ODA from WB, ADB, JBIC has repayment period up to 40 years and has a grace period of 10 years Usually, ODA has foreign element (at least 25%), the higher foreign element, the more favorable for recipient This is the distinction between aid and commercial lending Foreign component is determined based on the time loan, grace period and compare aided interest rates with commercial interest rates It is less than 3%, averaging 1%-2%/year Refunds in ODA capital must comply with basic credit principles such as loan with repayment of capital and interest after a certain time; give loan according to a pre-agreed plan (loan agreement document between ODA recipient countries and donor partners) [42] ODA capital usually comes with a certain purposeful investment program or project of the donor This list requires an agreement with donors, usually these projects invest in infrastructure consist of transportation, health, administrative reform, legal reform Sponsors do not directly participate in the management and operation of programs and projects, but able take part in indirectly as contractors or support experts ODA capital is used by donors as a tool to expand markets and strengthen their political and economic positions in different countries and regions around the world In fact, ODA is refundable or non-refundable transfer in certain conditions a part of GDP from developed countries to the developing countries Therefore, ODA is very socially sensitive
15 and to be adjusted by public opinion from ODA providers as well as recipient countries
Depending on different approaches, ODA capital could be classified according to supply resources, forms, conditions and models
Bilateral ODA is direct aid from one country to another through signed agreements between the two governments It includes foreign, technical cooperation and interest-free or low-interest loans, expressed in various forms such as import support, program and project support Moreover, it represents one of the multifaceted cooperative relationships between aid recipient and donor countries For the sponsor, this relationship is a part of their foreign policy toward the recipient country with the aim of gaining political consensus and support in the international and regional arena, promoting their viewpoint on values of freedom, democracy, and human rights
Multilateral ODA is official aid of international organizations (IMF, WB…) or regional organizations (ADB, EU…) or a country's government for certain countries but may be carried out through multilateral institutions such as UNDP, UNICEF The international financial institutions provide ODA primarily such as the World Bank, International Monetary Fund and the Asian Development Bank Multilateral foreign recipients could avoid or significantly reduce political and economic constraints Thus, multilateral assistance is more stable when there are major fluctuations such as economic crisis, oil crisis, armed conflict etc [29]
ODA foreigns are financial assistance with no obligation for repayment, it targets mainly developing countries with low-income levels and in areas of humanitarian, health, cultural, educational, reform and enhancing state anagement capacity
ODA concessional loans are refundable ODA with preferential conditions in terms of interest rate, period of grace and repayment that ensuring the non- refundable element reaches at least 35% for conditional loans and 25% for non- conditional loans Usually, concessional ODA loans are large, accounting for over 85% of total loans
Mix ODA loans include foreigns or concessional loans offered concurrently with trade credits which has a “non-refundable element” for conditional and non-conditional loans
Depending on the capital amount and the type of aid, ODA may be accompanied by certain binding conditions or non-conditions that relate to supplying, procuring goods and services from certain suppliers or countries as sponsor’s regulations
Budget aid provides ODA capital directly to state budget or local budget without certain programs and projects
Program aid is a set of activities, projects that are related to each other and may involve one or more sectors, territories or different objects to achieve one or several defined goals, performed in one or more stages For example, general development aid for education and training, environmental improvement, development aid for community integration in localities with many evacuees, etc
Project aid is set of interrelated proposals to achieve one or more certain objectives, to be implemented in a specific location, within a specified time and based on defined resources The project includes investment project and technical support project Technical assistance projects usually focus mainly on the transfer of knowledge and ideas; this type usually accounts for approximately 20% of the total ODA capital Investment projects mainly focus on building infrastructure (roads, bridges, schools) and it accounts for 80% of the total ODA capital [24]
ODA capital helps poor and underdeveloped countries supplement domestic capital, promote economic growth When goverments receive ODA capital, their budget will greatly reduce burden and increase the opportunity to focus on infrastructure improvement projects, and significantly improve socio- economic indicators such as transportation, communication, education, health, environment, etc For health sector, this capital is prioritized mainly to support health and ensure public health programs through projects on vaccination, disease prevention, and upgrading of medical examination and treatment infrastructure, reduce the infant mortality rate, increase the average life expectancy of the people, repel dangerous diseases, thereby significantly increasing the human development index in their country
However, ODA also has negative impacts on the recipient countries The ODA's characteristic is loan capital so it will increase the public debt burden for recipient countries With strict management and reasonable investment, economic benefits from ODA projects will be enough to cover debts However, if the management is not strict, it can lead to capital pooling, increase the total investment or the corruption evils, waste, the mechanism of "ask - give, allocate" reduce the effectiveness of projects, creating a debt burden for our future generations Morevoer, ODA capital is often associated with political factors rather than economic efficiency, most donor countries use it as a political tool to determine their influence in recipient countries These impacts can make the economies of ODA recipient countries become dependent
Through development assistance capital, donor countries will receive certain economic benefits from providing goods and services or transferring technology to recipient countries Furthermore, donor countries have also increased their influence and established their country's position in diplomatic,
18 economic and trade relations with ODA recipient countries in the international arena However, ODA can also increase political instability in the donor country if the ODA managing is ineffective The people will demand a clear explanation to the public from their government in budget using because ODA is also taken from the people's tax money In addition, if domestic enterprises that are protected as suppliers of goods, services, and technology transfer in the loan agreement operate inefficiently, this protection reduces production incentives and becomes a very unequal with other efficient enterprises at home and abroad
ODA for health is a key component of foreign policy for many donor countries and has an important role in supporting improvements in population health and helping to build human capital in low- and middle-income countries (LMICs) ODA then can enhance economic development, which in turn promotes and supports health security and the development and access to global public goods In addition, in response to the health and economic crises caused by COVID-19, ODA has played a unique role in financing emergency health systems in many countries and brought about the rapid expansion of necessary health services The average ODA capital shared by donors for health sector was about 7.9% in 2019 Between 2011 and 2019, most ODA supplier countries allocated approximately 60% of their capital to primary health care, with the remaining 40% allocated to health system strengthening [26, 41] However, whether a developing country or a developed country, health is a complex sector for both It is challenging to see tangible and short-term outcomes in health sector because, health outcomes are dependent on a range of inputs not only that are directly health related such as health infrastructure, social security system including health insurance, health and medical personnel development, health provision system management, and health financing but also economic growth, education, water and sanitation, nutrition requiring interactive coordination of many different socioãeconomic, environmental factors, something for which
19 there is little incentive or finance and structure to manage It is also reversible if access to health services is hindered, and takes long time for the inputs to make up the output Moreover, in many cases, it is dependent on individual behavior, which is difficult to influence or change (WHO, 2007)
Theories about state financial management for using ODA capital in health sector
Management defined as all the activities and tasks undertaken for archiving goals by continuous activities like planning, organizing, leading and controlling In other words, the state management concept is understood as an implementation of state power; the organized and regulated impact by the legal power of the state on social processes and human activities to maintain and develop social relations and legal order The state functions and tasks carried out by agencies in the administrative system from the central to local levels
❖ State finanacial manageent of ODA capital resource
ODA state financial management is an organized influence of state on all ODA capital sources by its power through a management mechanism to conduct its set objectives of attracting and using ODA capital Circular No 23/2022/TT-
BTC issued by the Ministry of Finance defined ODA capital is a capital source belonging to state budget used to enforce the country's socio-economic development goals and is reported in the state budget as law's prescribed Government unified state management of ODA capital base on ensuring the capital effictive use and debt repayment capacity Managerial decentralization association with responsibilities, powers and management capacity of ministries, sectors and localities ensure coordination in management, supervision and evaluation of relevant agencies in accordance with current legal provisions Ensure publicity, transparency and promote accountability for policies and procedures for mobilizing, managing, using ODA capital and concessional loans among sectors, fields and localities Preventing corruption, loss and waste in managing and using ODA capital Violating would be handle accordance with the law's regulation [16]
1.4.2 The principals of state financial management for using ODA capital
Firstly, foreign aid and ODA capital are a revenue source of the state budget and uniformly managed in accordance with the provisions of the budget law and the guiding documents State financial management for foreign aid projects from the stage of providing financial opinions in determining the policy on aid use; participating in project appraisal, allocating capital sources for projects; to study and promulgate financial management mechanisms, to confirm aid and to account aid sources into the budget; guiding and inspecting the observance of financial management regimes, verifying final settlements, and guiding the handover assets, materials and capital of projects after completion
Secondly, the budget law stipulated that all financial sources in foreign aid projects must be fully, accurately and timely accounted into the state budget, not omitted or left out of the state budget This principle ensures the budget law's strictness which helps the state to hold and operate the aid budget entirely, prevents loss, waste and corruption
Thirdly, expenditure of foreign projects, like other expenditures of the state budget, should be conducted only when satisfied conditions such as items
21 display in the assigned budget estimates; spending in accordance with the regimes, standards and norms prescribed by competent state agencies and decided by the heads of budget-using units For expenditures for bidding job must also be organized according to the bidding law
Fourthly, the autonomy principle in organizing management and efficient use of financial resources for foreign projects, thrifty spending, within the approved estimate, against loss, waste and corruption Directors of programs and projects, heads of units directly using non-refundable aid sources are responsible before law for the correct implementation of the objectives, subjects and other commitments stated in each programs and projects
Fifthly, the principle of compliance with the donor's regulations is specified in the document, financial agreement or in the project's document signed by both parties and reviewed, approved by the competent state agency.
The foreign aid projects management
An organizational model of foreign aid projects is carried out according to the Government's decree No 114/2021/ND-CP which defined a project owner can be a ministerial agency, a provincial People's Committee and affiliated administrative and non-business agencies and must be identified in the approval decision of program or project A project owner may self-implement the program/project in the case of small and odd aid projects, implementation time under one year, its deployment scale and scope is narrow, or the project owner proposes set up a management board to implement the project A program/project management unit is the representative agency for the project owner It has fuly authority on behalf of the project owner to perform the assigned powers and duties from the beginning to the end of the project including the settlement, acceptance, handover the project products in operation and use The PMU operates independently, has a staffing system, operational regulations, a seal, and is allowed to open accounts at banks and treasuries [17]
Figure 1.1 An organizational structure of PMUs
Source: Finance Department of MOH in 2022
The PMU establishment is decided by a governing agency according to the project owner' requirement PMU's organization includes a project manager or a project director or a project general director; a deputy project director and a project chief accountant PMU's functions, duties and powers are regulated in its establish decision The number of staffs and their duties involved in project management are usually clearified in the PMU's decisions They are selected according to the criteria of expertise, qualifications, experience and personal qualities defined in the job description or assignment given by the Project Manager and public before recruiment Regulations on PMU's organization and operation are promulgated by the governing agency or the authorized project owner Thus, the organizational model of program and project management might have some connection with state administrative management, for instance in case of the project owner is self-responsible for implementing the program/project activities and could also be independent in case the project
Project owner Department of financial planning
Supervise Planning Team Administrative Team
23 owner requests the governing agency set up a PMU to implement the project State management agencies, in the role of governing bodies would be responsible for urging, inspecting and supervising the activities of programs and projects Programs/projects manager, heads of units directly managing programs and projects using aid sources are legally responsible for the correctly implementing objectives, subjects and commitments stated in each program or project which approved by the donor and the competent state agency
Managing foreign aid projects comprise stages managing project’s objectives, manpower, implement plan, finance, procurement, bidding, supervising and evaluating
Specific project’s objectives were set by the manager and his associates These objectives are implemented and controlled by the members themselves This practical process involves both managers and unit's members in each level and among different levels Each member within his/her assigned responsibilities must achieve specific results Thusby, each unit at each level would be develop an implementation plan, prepares the conditions of manpower, facilities and financial resources to conduct rhythmly project activities and achieve targeted goals Supervising to adjust project activities appropriately according to objective requirements while implementing and accurately assess an achievement of project objectives
Mannaging manpower consist of managing project teams such as general planning team, procurement team, capital construction team, finance-accounting team, administrative team and secretaria team At the same time, managing specific individuals such as the project manager, deputy project manager, secretaries, chief accountants etc In addition, it also manages the training and retraining of project human resources
Managing project implementation plan includes master plan, annual plan and quarterly plan The master plan contains activities during the
24 implementation phase of the program or project The annual plan encompasses activities to be carried out in a year and the quarterly plan comprise activities to be conducted in each quarter The plan covers what needs to be done with very specific activities, the time for implementation and completion, and execution method to achieve program/project goals
Aid project finance is managed through the financial plan prepared for whole project The financial plan is established parallel with a project formulation process and estimates capacity of the annual disbursement and adjusting financial plan during the implementation process For management project funding come from donor's capital, the main spending principles followed donor's regulations For projects combine both sponsor's capital and domestic counterpartcapital, the spending would be accomply with the regulations of donor and Vietnamese government
Managing bidding, procurement includes principles, procedures, processes, approved plans for selection of consultants, goods procurement, construction works for the project/program The bidding purposes to select a contractor that meets the requirements of a bid solicitor then a contract would be signed with terms detailing the responsibilities of both parties The objective of procurement and bidding is to implement fair competition and transparency in bidding process to elect the right contractor who carry out the work to ensure maximum economic efficiency in project implementation
Managing project monitoring and evaluation is a process of continuously collecting, analyzing information to make reasonable decisions and solutions Monitoring includes regular, periodic and unscheduled monitoring They contribute to deal with timely many newly arising activities or problems occur during the project implementation avoid errors and ensuring the progress, quantity and quality of project activities Project evaluation of both qualitatively and quantitatively, periodically and at the end of the project to determine achievement level of the objectives and propose recommendations
The program and project management process iclude six following stages and related, closely linked together (Figure 1.2)
Figure 1.2 The program and project management process
Project identification is the first step in the project management process It based on the state's socio-economic development strategy, development orientation plan of the health sector and an existing problem or situation needs to be resolved and prioritize investment or accurately select priority areas for project investment
Project construction is the next step after determining the project area to invest in A project plan is prepared according to the donor and Government format This is a very important stage because the design of the project is required as a scientific, practical and highly feasible document
Project appraisal and approval is the next step when the detailed project has been completed and is highly feasible A formal, independent and systematic examination was conducted by government agencies and donors to assess the project documentation quality, an ability achieves its objectives and other issues such as time, budget suitable or not If project meets the appraisal agencies requirements, it can be approved by the competent state agency and move to an implementation stage Project implementation phase involves organizing, operating and carrying out specific project activities in a specific time to achieve the set project objectives
Project closing evaluation phase aims to review all project aspects with results and effectiveness achieved and inform to stakeholders The project evaluation results also brieft lessons learned in the process of implementing the project management stages and development orient of new projects in future.
The effectiveness of ODA capital using and state financial management for foreign aid
The effectively using ODA capital and state financial management in the health sector was identified by achieving the initially set goals of each project in terms of work quality, cost and perform schedule In other words, it was assessed through the policies's appropriateness and implementation processes; the achieved objectives of program/project stated; comparison, selection of input factors to achieve the expected output results, assessing a suitability of the project implementation process; ability to impacts through positive or negative changes caused by project implementation and sustainability through considering the benefits of project implementation will be maintained or extended when the project completed
The purpose of evaluating the effectiveness of foreign aid capital and state financial management in the health sector at a micro scale is to determine the appropriateness, achievement of goals, development efficiency, impact and sustainability of the project The project evaluation aims to provide useful and reliable information, helping the recipient government and donors have sufficient important information to make timely decisions and exactly, gain valuable experiences for the future projects OECD (2005) promulgated principles in evaluating the effectiveness of development assistance sources that was a set of 5 criteria comprise relevance, effectiveness, efficiency, impact and sustainability
It is a suitability of health projects implemented with ODA capital to the priorities and policies of target group, donors and recipients It would show
27 whether the implementation of that foreign aid for health program/project in the locality or region is reasonable or not? Whether the beneficiaries' demands are met or not, the initially set goals are achieved, thereby necessary adjustments are conducted to keep the project in line with the set roadmap
The effectiveness is an achieved extent measure of the health program/project using ODA capital, the appropriateness of the inputs and gained level of the set goals Target performance results are determined by comparing the achieved results of program/project with the set objectives in the feasibility report or approved project documentaries
The efficiency was defined through the input comparison, selection to gain the expected outcomes, the implementing process a health program/project with ODA capital is reasonable or not? Considering the efficiency, how can the health program/project using ODA capital save input resources to achieve the set goal?
The impact is positive or negative changes caused by the directly or indirectly intervention in implementation process of health program/project which using ODA capital Some specific issues are considered when assessing these changes such as is there any obvious change in the local health (administrative unit implementing the project) when project complete? (For example, establishing a village health care network in remote areas…)? By this project, the relationship in all aspects, including the diplomatic field between the two countries has any positive changes before and after the project? Is there a health facility built so that the Vietnamese people know that this is a cooperation project with the country (or aid organization)?
Sustainability is reflected in the aspects that while the project was implementing, there are institutional and policy conditions for the further
28 development after project complete For example, was there an adequate realistic plan for maintenaning the medical facilities belong to this project? Has the organizational structure and personnel to manage, operate and maintenance work and a plan to expand the financial resources needed for this established? Will relevant levels commit to ensure the requirements in operation, maintenance and protection of works after they have been handed over? The project would be continue to supervise, monitored and evaluated at all levels when it finished?
1.6.2 The impact factors on effectively using ODA capital and state financial management in the health sector
1.6.2.1 The synchronization of operating policies related to ODA capital
ODA policy system of the recipient country forms an overall framework for a receiving and using capital process, thus it directly affects an efficiency of ODA capital use The progress of project disbursement and implementation depends on the relevant procedures of donor countries as well as the administrative regulations of recipient countries A clearly, synchronous policy system, the simple, compact and flexible procedures will accelerate the capital disbursement and withdrawal, the project implementation and improve the efficiency of ODA capital use and ability to attract investment These process and procedures including legal documents such as the bidding law, the investment law, the state budget law, international treaties, guiding documents law, decrees, decisions, circulars on attraction and ODA use This system of legal documents in addition to the synchronous element, they are also necessary to closely study factors that are consistent with international practices and donors
It is a financial resource of project, money-create ability, organize cash flow in a reasonable way, ensure liquidity expressed in the capital size, asset
29 quality and profitability, ensure and maintain the project's activities are conducted normally The effectiveness of using ODA depends on domestic reciprocal resources or the financial capacity of recipient Although receiving countries have many favorable conditions and opportunities for development, without financial capacity, donor countries cannot invest Therefore, in order to improve the efficiency of capital use, ODA recipient countries need to strengthen and promote their own financial capacity
The competency, qualification and experience of project executive staffs have a positive impact on its results of investment activities as well as the efficiency of capital use When mechanism and capacity of executive team are good, even though the aid capital is small, it can avoid loss and waste, so the use efficiency is very high The capacity of the executive staffs is assessed through a several criteria such as professional qualifications, expertise skills, work experience, organizational, executive ability, honesty, objectivity and ability to withstand high pressure at work
The participant parties' capacity would decide the progress and quality of project activities during the investment implementing phase If the construction units have got a good financial capacity, their reciprocal capital for investment projects would be better This is very important for projects using state budget capital when the projects were implemented first, then settlement upon project complete or advance during project implementation Conversely, if the contractor lacks construction experience and their ability to maintain and turn around capital is poor, it will directly affect the project's implementation schedule, especially for specific projects such as in health sector, difficulties and risks may occur during the implement process that can lead to negatively affect the project results
Experience in state management for ODA projects of some countries in the world
China was assessed by donors as one of the most effective ODA users Chinese ODA capital management mechanism was a principle of centralized state management, but the implementation process is decentralized Government defined that foreign capital especially from the World Bank plays a positive role in promoting Chinese reform and development This success was due to the process of approval and selection projects using ODA capital, which was conducted orderly manner, from project preparation (feasibility assessment, technical design) project evaluation (market analysis, socio-economic efficiency, debt repayment capacity ) to cooperation strategy, projects well planning, coordination and implementation, close monitoring and supervision mechanism Government special emphasis on management and supervision Two central agencies that manage foreign capital are the Ministry of Finance and the National Development and Reform Committee MOF resposible seek foreign capital sources, and supervises capital using It requires local finance departments to regularly inspect projects' activities, and coordinate with donors in inspecting each project Ministries, agencies and localities have an important role in implementing and coordinating with the MOF to supervise this capital resource [19, 28]
In Malaysia, foreign capital is centrally managed by the economic planning office This is the planning agency at central level, responsible for approving project programs and deciding on budget allocation for national development goals Foreign capital is prioritized by the government to implement projects on hunger eradication and poverty reduction and enhance people's capacity Regarding the project evaluation, Malaysia highly appreciates the technical
31 support from donors to increase human capacity through training courses The government emphasis on project monitoring, inspection, and evaluation, which builds up from project planning and implementation stages They encouraged assessment coordination between donors and recipient countries by harmonizing the evaluation systems of both sides Evaluations focus on the project's efficency compare with policy and strategy, improve implementation, and emphase on results In Malaysia, monitoring and evaluation activities were carried out regularly without affecting, hindering the project's activities, on contrary, it will help improve transparency and especially reduce waste, avoid negativity, corruption [26]
In oder to use foreign capital effectively, Polish government has focused on investing in human resources and institutional capacity A clear and precise legal basis in the whole process is a condition for successful control and implementation of foreign projects Poland high appreciates coordination with aid partners and support sources are considered as public financial funds Procurementing public property must follows a public procurement law and strictly accounting rules The disbursement process is quite complicated to control money used for right purpose Responsible agencies consist of ministries, some government agencies in which the Ministry of Development plays a leader
Government specially concerned to controlling and auditing management systems Responsible agencies include internal audits of each agency, foreign audit firms hired and audit services of the European Commission When the audit detects errors, invalid points they would be reported to all agencies Controlling focuses on checking the legality and legitimacy of transactions, annual checks and expenditures certifications, end-of-term checks, extraordinary checks These activities are conducted regularly to promote the project implementation process [28]
There were some following points learnt from an experience of ODA- using countries such as establishing a professional PMU with members who are experts in different fields of bidding, supervision, procurement of materials; using ODA capital for right purposes; foreign aid capital should prioritized for projects without revenue sources such as health care, disease prevention…; anti-corruption, strengthen inspection and audit; transparency in public procurement Information accessing fairly for all parties participating in the bidding Define clear responsibility for individuals in project management Auditing and inspecting should be carried out regularly by internal audit system and hires independent professional auditing organizations to conduct; project evaluating should be conducted regularly; if the recipient country did not have experience and capacity to evaluate project, it should work closely with donor to check and evaluate the project [24]
In chapter 1, author mentioned many studies from international researchers and experts and choosed the gap in managing and using ODA capital in health sector to study for graduation thesis Besides, the theories on state financial management for foreign aid were presented that consist of concepts, objects, current aid methods to Vietnam; forming, organizing process and financial sources and manage foreign aid projects The evaluate criteria and impact factors on effective using ODA capital were shown as scientific basics for my research Experiences of some countries in effectively using ODA capital and several suggestions for Vietnam were mentioned in this chapter
RESEACH METHODOLOGY
Research approach
Research approach is defined as framework in which social phenomenon is characterized and analysed accordingly (Remeny et al., 1998) There are two major research approaches in academic studies, namely deduction and induction Like the previous section, this paragraph is developed to choose the right research approach for this study Deductive is acknowledged as common approach is academic studies (Bryman and Bell, 2007) This approach is followed by the process of starting from general things to specific context
(Saunders et al., 2009) According to Anderson (2004), deductive research approach aims to investigate social phenomenon’s aspects throughout hypothesis development and hypothesis validation in order to obtain empirical evidence of social phenomenon
In contrast, inductive research approach is developed in the process of differing to deductive research approach It means that inductive research approach aims to study social phenomenon through multiple cases and then formulating theories and concepts within (Anderson, 2004) Moreover, Hackley (2003) asserts that inductive research approach is suitable to the studies that aim to develop new theories and concepts and it is more reliable in case of social phenomenon has multi-facet or complex Upon on the differences between deductive and inductive approach, the study is conducted with deductive research approach to be applied and this choice is supported by following arguments
First, the study aims to apply existing theories and concepts to analyse the impact factors on the effective ODA capital using and state financial management This aim is supported by positivist point of view and this view is directly supported by deductive research approach (Saunders et al., 2009; Schiffman and Kanuk, 1997)
Second, the choice in between deductive and inductive research approach is based on the nature of the researched topic (Creswell, 1994) The studies which
34 come up with common researched topic are often resolved by deductive research approach and other cases are undertaken by inductive research approach (Lewis, 1993) In this study, state financial management for using ODA capital is main content thus, deductive research approach is better choice than inductive research approach [33, 35]
Third, deductive research approach often has lower time consuming and effort to the researchers than inductive research approach (Saunders et al., 2009) In this context, using deductive research approach is more convenient than using inductive research approach.
Designing questionaire
The objective of questionnaire design is to make clear and candid questionnaire to the respondents so that they can easily understand the contents as well as providing correct answers (Saunders et al., 2009)
2.2.1 Designing scales of evaluate the effective using ODA capital
Building scales of evaluate the effective using ODA capital was based on guidance document of OECD development assistance committee.[42] It consists of five criteria that were edited suitable with conditions applied in Vietnamese health sector The general rating scale was built by synthesizing the scales that have been confirmed and verified by analyzing survey data The questions aimed to obtain participants' opinion about each criterion, then descriptive statistical analysis Questionnaire was designed in Vietnamese and divided into two main parts (Appendix 2)
- Part I included questions about demographic variables which regarding respondents’ basic information encompassed gender, age, education, name of the ODA health project which they participated in collaboration, management and administration, implement time and donor
- Part II was designed to collect assessments from participants about the effectively using ODA capital and state financial management in health sector in Vietnam This part comprised 22 variables in total to measure five components
This measurement based on a 5-point rating scale which corresponding to 1 strongly disagree, 2 = somewhat disagree, 3 = neither agree nor disagree, 4 somewhat agree, 5 = strongly agree Participants gave points for 36 opinions relate to factors include the relevance, the effectiveness, the efficiency, the impact and the sustainability (see appendix 2):
2.2.2 Designing a scale of factors impacts to effectively using ODA capital and state financial management
The scales of factors impact to effectively using ODA capital and state financial management was designed by synthesizing previous studies combined with the qualitative research steps and expert’s consultation In this study, evaluating influential factors of effectively using ODA capital and state financial management comprised 18 variables in total to measure four components (The synchronization of operating policies related to ODA capital, project’s financial capacity, competency of executive staffs and competence of construction contractors) This measurement based on a 5-point rating scale which corresponding to 1 = strongly disagree, 2 = somewhat disagree, 3 = neither agree nor disagree, 4 = somewhat agree, 5 = strongly agree Participants gave points for
36 opinions regard to elements such as the synchronization of operating policies related to ODA capital, project’s financial capacity, competency of executive staffs and competence of construction contractors (see appendix 2)
The framing of variables in research hypotheses guides the treatment of each in my analyses
The purpose of a pilot testing is check and screen independent variables that influences effectively using ODA capital and state financial management
Synchronization of operating policies related to ODA capital:
• This variable likely relates to the alignment and coordination of policies, procedures, and guidelines governing the management and utilization of Official Development Assistance (ODA) funding for capital projects
• The scientific foundation could be grounded in organizational theory, public administration, and development economics literature on aid effectiveness, policy harmonization, and institutional capacity building
• Potential metrics could include indicators of policy coherence, stakeholder alignment, implementation fidelity, and perceived effectiveness of ODA capital deployment
• This variable focuses on the financial resources, budgeting, and fiscal management capabilities of the capital projects
• The scientific basis could draw from project finance theory, public- private partnership models, and development project management research
• Relevant measures could include debt-to-equity ratios, liquidity indicators, cost overrun rates, and budget variance analysis
• This variable examines the skills, knowledge, and capabilities of the leadership and management teams overseeing the capital projects
• The scientific underpinnings could come from human resource management, organizational behavior, and public sector leadership studies
• Potential assessment criteria could include educational qualifications, relevant experience, leadership competencies, and project delivery track record
• This variable looks at the technical abilities, resource availability, and performance of the construction firms involved in the capital projects
• The scientific foundation could derive from construction management, engineering project management, and supply chain management literature
• Relevant metrics might include contractor technical certifications, project execution timeliness, quality compliance, and safety records
When we conducted a pilot study, we would simultaneously examine whether respondents understand exactly the scale meaning and scale’s expression is understandable and easy to answer The analysis results of the collected data from this pilot survey would be used as a base for adjustment before implement a formal investigation The sample size of the trial was 25 units that were selected by non-probability method The participants were executive staffs who are working in PMUs of Ministry of health In order to prepare for this survey, I and three of my friends who volunteered to help me conduct interviews them at preappointed coffee shops Four members of our research team went to several coffee shops in there to meet them and conducted the trial survey The interviewers were trained to be able to assist the interviewees to complete the questionnaire so they could perform well in the interview The reliability of pilot sample was tested by Cronbach’s Alpha and their results were accepted (see table 2.1)
The synchronization of operating policies related to ODA capital 0.760
Sample and data collection
After the survey’s questionnaire is prepared, the next important part is to determine how many consumers will participate in the survey Saunders et al (2009) denote that there are two types of sampling techniques: probability sampling and non-probability sampling Hair et al (2010) suggested that the sample size should be at least 5 respondents per 1 observed variable In order to
38 collect at least 5 respondents per 1 observed variable and samples for total the study’s 40 observed variables it is necessary to collect at the minimum sample size of 200 respondents To get this samples size, 270 questionnaires were given to participants To gather information for analyzing, 270 questionaires weregiven to participation directly of by facebook It took abuot 7 to 10 minutes to answer the questionaires Such application reduces the anxiety to the respondents in the way of providing information It means that survey’s questionnaire brings anonymity advantage and the respondents are not worry about their identities to be exposed and therefore all information related to the respondents are kept in privacy Investigation process was conducted in the period from 15th March to 30th March 2022 in Ministry of Health and local health departments Among 270 questionaires provided to participants We collected 250 responses that reached a ratio of 95,4%.
Analyzing data plan
At first, data will be input and screened to identify missing samples After rejecting all invalid samples, data will be encoded as in the following table
1 REL1 Are the project objectives consistent with the local, regional and national development orientations and goals in the future?
2 REL2 The master plan as a basis for project investment was available before implementation?
The pre-implementation project plan was revised several times until it was completed Does the change affect the time and increase the project cost?
4 REL4 In this project, is the goals of Vietnamese government consistent with the donor’s goals and principles?
5 REL5 Do relevant units, departments and local authorities coordinate synchronously during the project implementation?
6 EFF1 After completed, did the project achieve its initial goals? (e.g local
N0 Label code Explanation health infrastructure was improved, better quality of health care services for the people, etc.)
7 EFF2 Did the project guarantee an implementation schedule as planned and completed in time?
8 EFF3 The Vietnamese counterpart capital has always been fully and timely deployed during the project implementation?
9 EFF4 Was the ODA capital disbursed well enough to help the project implement more effectively?
10 EFC1 Did you know the purpose, content, and requirements of this project from it prepare implement until now?
When the project started, were there fair and transparent procedures for participating in public health projects? (at least, a public bidding)
12 EFC3 Was the actual cost consistent (with negligible increase or decrease) with the planned cost estimate?
Compared with other health projects with similar characteristics to the project (at least 2 cases) in terms of implementation time and other characteristics (scale and equipment), this project cost was equivalent level?
14 EFC5 Has the project paid timely to the materials supplier and labor
(without delaying payment or salary dept, raw materials, etc.)?
Besides the benefits, you noticed there were any undesirable effects directly or indirectly interference caused by the project implementation?
Has there been a significant change in local health status (beneficiary administrative unit) when project completed until now? (e.g., the quantity of medical staffs increases, health services quality improves)
By this project, has the relationship in all aspects, including a diplomatic field between Vietnam and the donor country changed positively?
18 SUS1 By the time the project completed, was there a realistically satisfactory plan for sustaining this project outcome?
19 SUS2 Has the organizational structure and human resources to manage and administer maintaining project results already established at
N0 Label code Explanation the time of project completion?
Has a plan to expand the necessary financial resources for sustaining the project results established at the time of project completion?
Would relevant levels make commitments to ensure requirements in operating and maintaining project results after it has been handed over?
22 SUS5 Would the project continue to be monitored, supervised and evaluated at all levels when it is finished?
The synchronization of operating policies related to ODA capital (SPO)
Were policies and strategies to attract ODA for Vietnamese health sector built on clear bases and planned in accordance with the country's socio-economic development conditions in each period?
Did the ODA management mechanism and policy in Vietnamese health sector consistent with the specific ODA management mechanism and policy of donor on the compliance principle with the provisions of Vietnamese law?
When developing an attract ODA capital program, the Vietnamese government often anticipates policy risks during project implementation?
26 SPO4 Is the system of directing and operating documents on ODA in the health sector issued timely, ensuring to meet the reality?
Has strengthening the National Assembly's supervision of ODA projects in the health sector (inspecting, examining and auditing projects) been focused?
28 FIC1 During the implement stages of health ODA projects, was the disbursement progress of the donors always according to the plan?
29 FIC2 Did sponsors have got reserve capital for possible risks in each project?
The reciprocal capital for Vietnamese health ODA projects has been fully and timely deployed to help the project implementing efficiency be better?
31 FIC4 There is no case using ODA capital in the health sector for wrong purpose?
Competency of executive staffs (CES)
32 CES1 Did staffs involved in managing and administering ODA projects in health sector have got professional qualifications that are highly
N0 Label code Explanation relevant to the requirements of their current jobs?
Staffs involved in the managing and administering ODA projects in health sector regularly update the operating instruction documents and understand the project's actual situation?
34 CES3 Did staffs involved in managing and administering health ODA projects in different departments have got synchronous coordination?
35 CES4 Have the negative phenomena in managing health ODA projects been strictly controlled?
Competence of construction contractors (COC)
Has a capacity of domestic construction unit (conditions, personnel, management qualifications, equipment, etc.) met ODA projects' requirements in health sector in Vietnam?
Have foreign contractors hire domestic subcontractors ensured compliance with the prescribed conditions in the contract of health ODA projects in Vietnam?
When implementing the project, did the contractor used qualified and experienced personnel and was approved by supervision consultant, investor to execute with strictly supervision and management in terms of progress, quality as well as safety during construction?
Before construction of any item, did the contractor disseminated safety knowledge, check machineries, equipments and gave detailed instructions to the workers aim to complete construction phase efficiently without any accidents or breakdowns?
During the construction process, a contractor complied with the project's requirements, technical standards, construction drawings, approved construction methods, without major problems occurred; all minor defects are repaired by the contractor to ensure quality and approved by consultant; quality records are clearly shown in as-built document
The data collected would be cleaned and processed by software SPSS 22.0 Some methods of processing data used in this study were as following
2.4.1 Reliability analysis by Cronbach’s alpha
Cronbach’s alpha is a measure to be used to assess the internal consistency of a questionnaire that is made up of a set of scales and test items In other words, the reliability of any given measurement refers to the extent to which it is a
42 consistent measure of a concept, and Cronbach’s alpha is one way of measuring the strength of that consistency The value of alpha (α) is computed by correlating the score for each scale item with the total score for each observation and then comparing that to the variance for all individual item scores Its result may be between negative infinity and 1 however, only positive values of alpha have meaning In general, alpha coefficient ranges in value from 0 to 1, and the increase of this value means that the correlations between the items increase (Amit Choudhury, 2010) Many methodologists recommend a minimum α coefficient that acceptable reliability score should be between 0.6 and 0.8 (or higher in many cases) However, lower thresholds are sometimes used in the literature (Reynaldo et al., 1999) In this paper, scales have got Cronbach’s alpha coefficient ≥ 0.6 will be accepted Besides assessing the reliability of scales, Cronbach’s alpha analysis also helps to check whether any item is not consistence with the rest of the scale through item-total correlations Item-total correlation performs the correlation of one variable with others in the same scale; the higher correlation value, the better correlation between that item and the others Variables have item-total correlations > 0.3 will be accepted; the others which have item-total correlations < 0.3 will be eliminated from analysis data
Exploratory factor analysis is considered as an interdependence technique that to be used to minimize and summarize data to a smaller set of summary variables which necessary for research as well as to find out relationships for different variables The appropriate level of internal correlation between the observed variables in the research concepts is expressed by the Kaiser-Meyer-Olkin (KMO) coefficient, which measures the suitability of the sample and the significance level of the Barlett test KMO has an appropriate value in the range between 0.5 and 1.0 and Sig < 0.5, factor analysis is more appropriate factor analysis (Hair, 1988) In case of KMO has value smaller than 0.5 or Sig is greater than 0.5, it indicates that factor analysis may not be appropriate
Researcher could identify the quantity of factors to extract in the model by analyzing exploratory factor They should use some factors equal to eigenvalues quantity of the correlation matrix that are greater than one (DeCoster, 1998) Therefore, this study will be plots the eigenvalues in descending order then the number of factors will equal to the number of eigenvalues that occur prior and have greater than 1.0 values The results of EFAs were used for interpreting factor matrixes The varimax rotation process was utilized to produce multiple group factors Factor loadings which indicate correlations between the variables and the factors are required to have greater than 0.5 values Then, a factor can be interpreted in terms of the variables that have high load on it
Regression analysis is a modeling technique for analyzing the relationship between a real-valued dependent variable Y and one or more independent variables X1, X2, X3,…., Xk (Ragsdale, 2007) The goal in regression analysis is to identify a function that describes the relationship between these variables as closely as possible so that we can assess the impact of each independent variable on dependent variable as well as predict the change in dependent variable when there is any change in independent variables
At first, it is necessary to test assumptions for regression analysis According to Green W H (1991), when the quantity of sample is larger than 100 (n> 100), following three tests are required
(1) Partial correlation of regression coefficient Independent variables correlate significantly with the dependent variable (for each independent variable) T test with significance level of partial regression coefficient with 95% confidence (Sig ≤ 0.05)
(2) The model’s relevant There is a linear relationship between independent variables and dependent variables Test F: Analysis of variance (ANOVA) with Significance (Sig.) 95% confidence (Sig ≤ 0.05)
(3) Multiple Collinearity of independent variables with Variance Inflation Factor
(VIF)