Investment capital for private economic development in the central coast

However, most of the studies have been conducted from the general perspective of the overall privatesector areas throughout the country without considering the significance of private re

INTRODUCTION

1 The Need for Research

The decisive factor in the economic development of the Central Coast is theavailability of capital investment Securing support channels for the private sector

is always a challenge

This obstacle requires careful analysis and investigation so that positive andpracticable solutions can be identified to maximise the growth of the private sectorand to fulfil its potential for development With this in mind, the author selected the

topic "Investment capital for private economic development in the Central Coast”.

2 Overview of research on private sector

Many studies in the field of private sector have been conducted However, most of the studies have been conducted from the general perspective of the overall privatesector areas throughout the country without considering the significance of private research investment in the private sector and, in particular, the needs of the private economic (PE) sector of the Central Coast (CC)

So, a research project specifically focused on "Investment capital for private for economic development in the central coast" is considered to be necessary.

3 Research objectives of the project

- To systematize and clarify the arguments for investment capital in PE development,

- To assess the analysis of investment capital for PE development in the CC area inrecent years yet to be fully realized The need for deeply invested capital is the decisivefactor for economic development in general and in the private sector in particular.-To offer recommendations for capital investment and other support solutions toprivate sector development in the Central Coast zone From the theory and practice

of recent investment capital for private sector development in the Central Coast

4 About research methods

Threads will include using dialectical materialist methodology, research onthe issues of development, analysis of specific historical examples and acomprehensive review of the organic relationships with each other Simultaneousthreads will also use a statistical method such as testing, comparison and analysis

to clarify the issues raised Combined with a direct survey of 305 enterprises in the

CC area, the facility to verify the arguments and proposed solutions will be a coreobjective of the research

5 On the subject and scope of the study

 Subject of study:Research into the Investment in private sectordevelopment including economic forms: private enterprise, partnership companies,limited liability Companies (Ltd), Joint Stock Companies (JSC) (including stateowned JSC minor proportion)

 Scope of research:Space: including 14 coastal provinces along the CCTime: From 2005 to 2010

 Scope of the study: The study of investment capital for PE sectordevelopment from 2005 to 2010 for different types of private firms

6 Scientific and practical significance

In terms of reasoning, the topics which have a practical new contribution to make are:

- Explanation and clarification of the concept of the private sector

- Factors affecting the investment of private capital for economic development

- Analysis and clarification of the concept of capital

- An estimate of the capital that the private sector needs to invest

- A sample survey of 305 enterprises in the area CC to verify the theory andpractice of capital investment

- Identification of the direction of regional economic development, private sectordevelopment in the CC region in the years to come Demand forecasts for thedevelopment of private sector investment in the years to come

- Provision of a system solution consisting of six recommendations for investmentcapital by the private sector for the future development of the CC region

7 Structure of topics: Three topics for investigation and research

Chapter 1 The basic problems of the private sector

Chapter 2 Current investment by the private capital for economic development the CCChapter 3 Solutions and recommendations on investment of private capital for economic development the Central Coast

Chapter 1

BASIC PROBLEMS OF DEVELOPMENT CAPITAL INVESTMENT

PRIVATE ECONOMY 1.1 PRIVATE ECONOMIC OVERVIEW

1.1.1 The concept of the private sector

The private sector is understood to be all business establishments in the country which are not based on state ownership of the factors of the production process and operate on the principle of autonomy: their own money; business organizations;

3business owners and self-distributed financial results.

1.1.2 Basic characteristics of the private sector

First, the operation of the private sector is always associated with the interests of the individual and with a dynamic economic area which is sensitive, adapting quickly to market changes

Second, the business activities of the regional private sector can sometimes be spontaneous, derived from immediate personal interests and not necessarily focused on sustainable development and any benefits to the wider community.Third, most of the enterprises of the private sector have the ability to operate with lower capital accumulation and concentration

1.1.3 Relationship between the implementation of private sector development objectives with strategic goals in the socio-economic development of the economic zone

An economic zone is a specific territorial economic department of the national economy It has specialized manufacturers closely associated with the development

of synthetic

Regional economic policy aims to achieve the following three objectives:

- Growth targets

- Objective stability

- The income distribution objective and balanced development

1.1.4 The role of the private sector in the economy

- Exploiting and mobilizing all social resources for development investment,

- Making a positive contribution to the restructuring of the economy towards a more rational, efficient, modern system,

- Promoting manufacturing development, contributing significantly towards national economic growth

- Creating job opportunities, labor restructuring labor and development of human resources

- Contributing to the expansion of external economic relations and attracting

foreign investment

1.2 Investment of private capital for economic development

1.2.1 The concept of investment capital for private sector development

- The concept of investment

- The concept of investment and development

- Capital investment for private sector development:

Investment capital for private sector development can be provided from various sources including the Government and the people, the financial institutions, banks and other organizations and foreign invested capital provided specifically for private sector development

1.2.2 Contents of private economic development

Investment in the economy

Capital is defined by Thread: All resources are converted by money put to use in the process of investment in order to maintain existing resources and create greater potential for the successful operation of the enterprise, individual business and society as a whole

The field of investment capital for private sector development

- Invest in building infrastructure to create favorable conditions for private sector development-Investment in the establishment of new enterprises

- Investment is used to replace existing equipment in order to maintain currentoperations or to modernize, increasing operational efficiency

- To strengthen the consumption of products in the market in order to increase salesvolumes, further confirming the company's position in the market

-Investment to expand consumption in new markets

-Investment in environmental protection and labor safety performance

-Investment in scientific and technological innovation

- Investment to improve the skills of the management of the business and of skilledworkers who have an important role in determining the success or failure of the business

Criteria evaluation system effective investment of private capital for economic development

- The ICOR

-The ratio of working capital for the first place

-Return on capital investment

- Return on total assets that are put into use for production and businessactivities called ROA (Return On Total Assets)

- Efficient capital determines the ability to profit from every dollar of equity to

be considered against the criteria ROE (Return On Common Equity)

- The effect of the use of capital investment is calculated by the rotation of the entire capital

- The role and policy orientation of the state for private sector development.

- The impact of inflation

- The financial condition of the population

- The ability to accumulate business so that they become self supporting and sustaining

If ICOR is declining, GDP grows every year providing a more efficient economy and vice versa

1.3 Experience investing private capital for economic development in the country, region and economic lessons for central coast

1.3.1 Experience investing private capital for economic development some countries with economies in transition

6development of these enterprises will lead to the growth of businesses in the privateeconomics sector

- Hungary

Legal reform; capital investment; Technological and innovation;

management assistance; lead to higher exports;

- Experience Investing private capital for economic

development of some countries

South Korea: Has 51 financial Institutions providing capital and advice for start-up enterprises

- Thailand: To promote investment in Thailand using supportive measures như: exemption, tax exemption and support investment in disadvantaged areas

- Taiwan: Establish a monitoring agency, to help SMEs

- Malaysia: Government support to the private sector through preferential loan program

- Experience Investing private capital for economic development of the Mekong River Delta

1.3.2 Some lessons learned about the investment of private capital for economic development of countries and economic regions

First, the role of government is very important in creating favorable conditions for private sector development

Second, the governments of most countries have support policies, stimulating private sector development

Third, the effective use of financial incentives, tax and other support measuresFourth, The effective use of the legal system, the macro-economic policies and measures to encourage cooperation among enterprises together

Fifth, in order to create sustainable development, the State must develop a strategy

of socio-economic master plan

Conclusion Chapter 1

In Chapter 1, the following main content subjects will be included:

1 Focused analysis, interpretation and clarification of the basic theoretical issues about the private sector, the factors affecting investment capital for private sector development and the Important role of the private sector to the economy

2 How to raise capital for investment and private sector development, private sector development investment areas today and the criteria for evaluating the effect

of investment capital for private sector development

4 Through experience in investment capital for private sector development of a number of countries, particularly China and the Mekong Delta provinces, to draw lessons about investment capital for private sector development in the CC.

Chapter 2 STATE CAPITAL INVESTMENT FOR PRIVATE ECONOMIC DEVELOPMENT OF THE CENTRAL COAST

2.1 GENERAL SITUATION, PRIVATE SECTOR ECONOMIC

DEVELOPMENT IN THE CENTRAL COASTAL

2.1.1 Analysis of Strengths, Weaknesses, Opportunities and Threats of Private Sector Development on the Central Coast

The advantage to private sector development for the Central Coast (Strengths - S)

+ S1 - favorable geographical position

+ S3 - high economic growth

+ S4 - Land also for industrial development

+ S5 - Labor abundant

+ S6 - Industry production and diversified business

+ S7 - commercial banks operating system in Central Coast are diverse and widespread

- Weaknesses private sector development Central Coast (Weaknesses - W)

W1 - nfrastructure is not yet complete, we can say it is still weak

W2 - labor force have not been trained and is inexperienced

W3 - People's potential in weak

W4 - Technology and processing of agricultural, forestry and aquatic products and non-agricultural sectors of the undeveloped

W5-credit capital shortage

- The opportunities for private sector development the Central Coast (Opportunities – O)

O1 - Sponsored by domestic and international organizations to build and develop rural infrastructure Central Coast is higher than other regions

O2 - international economic integration

8O3 - Workforce has high potential

- The risk to private sector development Central Coast (Threats - T)

T1 - Natural disasters occur frquently

T2 - weak competition in attracting investment

T3 - The challenge of integration

T4 - floating market of agricultural products

2.1.2 The development of private economic central coast

- Development trends in the amount

- More diversified development trend of the industry structure

- The increasing trend of the share capital in total social investment has not yet become apparent

2.2 State investment in private capital for economic development the CC 2.2.1 Status of investment capital for private sector development

- The reality of the investment funds

 Capital investment channeled through the State budget

Through a survey of 305 enterprises in Central Coast support for policy interest rates, up to 88 businesses in the area surveyed (accounting for 28.8%) did not receive this support The reason: either these businesses do not need loans, or do not meet the conditions to borrowing Businesses need capital and loan eligible to receive this assistance, although not all businesses meet 100% of demand

- Investment budget through tools tax exemption or reduction for businesses in accordance with the tax laws, the Law on Promotion of Domestic Investment

 Capital investment through the credit channel

Main channel to raise capital at present and certainly the long-term regional enterprises of private sector Central Coast is bank credit

The commercial banks are expanding, and strong growth in the region Improvements in procedures to attract deposits, lending and expanded forms of mobilization have increased a step mobilization and supply of investment capital for economic development in the region.85.2% of private enterprises in the demandfor loans in the future

* Investment through medium and long-term ones: limited resources

* Capital investment through non-formal credit channels - the underground marketActual survey of 305 businesses in Central Coast , there are 36 enterprises (11.8%

of the sample) had loans on the underground market

 Capital investment through financial leasing companies

Only 15% of businesses use finance lease form, with capital raised through financial leasing accounted for about 28% of average annual capital needed

 Investment funds through organizations supporting small and medium enterprises

- Fund territorial credits: No activity in Central Coast

- Investment capital through Small and Medium Enterprises Association: No activity

- Investment Fund capital through the development of small and sized enterprises: No activity

medium Policies, programs and other support

  APEC Financial Institutions

  The programs and policies of the State

 Investment funds through other forms

- Venture Capital Fund

In Central Coast areas, activities of funds Central Coast not occurred Enterprises

of regional private sector Central Coast absolutely no access to funds from the organization

- Commercial Credit

Enterprises of regional private sector Central Coast made Comercial Credit in business operations but do not use the transfer tool

 Investment from deposits of residents in the area

2.2.2 The reality of the investment sector of private enterprise economy the central coast

- Invest in building infrastructure for private sector development the Central CoastTotal capital investment in infrastructure development the Central Coast in period 2006 -

2010 is 527.968 trillion, accounting for 30.01% of total expenditure in the area However,the economic infrastructure, social Central Coast region lacking, weak, not synchronized,

so the investment in many projects still patchwork

- To invest in the establishment of new enterprisesFor private sector investment in increased and more important position for theeconomic development of the region In recent years, capital investment next yearare higher than last year and growing at a very high rate, an average of more than20% In fact, small-scale private sector areas, the rate of investment in moderation,

10the absolute number is increasing every year, but the total social capital tends toreduce the share of the economy.

- Investment in fixed assets and long-term financial investment of the enterpriseThe value of fixed assets and long-term financial investment the average of the firstenterprise in 2000 was 0.862 billion / business (Average of the Central Coast 0.65billion / business), the 2010 is 6.835 billion / business ( average of the CentralCoast is 4.3283 billion / business) Thus, the Central Coast were fixed investmentincreased in 2010 compared with 2000 was 6.65 times Increased value of fixedassets is a powerful help private sector can survive and grow

- Investment in engineering, technology

According to a survey of 305 enterprises of private sector in the area CentralCoast that there are 189 enterprises (62% of sample) said that they do not need tochange the technology or can not give the answer that they need to innovatetechnology? In the remaining 116 enterprises (38% of sample), only 18 companies(15% of 116 firms) have specific plans for technological innovation; remainder(85% of the 116 businesses ) will not know what technological innovation,technological innovation bring any results for now

- Investment to expand market outlets to increase sales, increase profitsfacilitate business expansion and development in depth

Most of the population in low-income areas CC, the consumption is notlarge If you compare the actual revenue share of the economic regions of thecountry, can be clearly seen that consumption of CC region is very low population

In 2010, the turnover rate of CC from the lowest of 15.4% in the comparison areas.Rate this with the Red River Delta is 23.18%, of the South East is 34.9%

- Investment to improve management and skilled labor

Currently, the use of private sector Enterprises often talented humanresources in a "Do squeezed lemon peeled" Cohesion Between workers andbusiness owners are slim Long-term training strategy for Businesses withoutemployees Most use of the available labor market Need each other, cooperate, allneed each other, broke up

2.2.3 Investment performance of the private sector Enterprises the CC

* Performance Indicator funded:

From 2004 to 2010, capital efficiency, rose, particularly in 2008 was the Impact of the economic crisis, capital efficiency has decreased by 0.22 from 2007, 2009 and

2010, this ratio tends to increase again

* Target after-tax rate of return on capital

* 61/305 Enterprises (20% of sample) with margins of over 15%,

* 76/305 Enterprises (24.9% of the sample) with margins of 10-15

* 75/305 Enterprises (24.5% of the sample) margins from 5-10%

* 85/305 Enterprises (27.8% of the sample) with the profit rate under 5%

* 7/305 Enterprises (2.3% of sample) loss in 2010

* Target for 1 invested workplace

Compared to the country, the investment of labor for one less than the national average is 0.52 [5] This fact reflects the level of technology and capital equipment investment by private sector Enterprises CENTRAL COAST area is too small.2.2.4 SPSS analysis sample for more information about business the private sector the central coast

* - The relationship between the inputs to the business results of enterprises

* Results of the study

- For commercial enterprises, service

Ln (y) = 0.620 + 0.198 Ln (X4) + 0.367 Ln (X3)

Italian = e0, 620.X50, 198.X30.367 = 1.8589 X50, 1897.X30, 367

This model has R2 = 0, 697, standardized and R2 = 0, 685

- For manufacturing and construction enterprises

Ln (Y) = 0.664 + 0.351 Ln (X1) + 0.471 Ln (X3) + 0.319 Ln (X6)