The thesis clearly determines the constituent elements of the investment environment, evaluates the investment environment; measure and analyze the influence of investment environment factors of small and medium enterprises in Vietnam
1 BACKGROUND The rationale of the thesis The investment decision is the commencement of production and business activities, it also contributes to boosting economic growth, create jobs, reduce poverty and improves welfare Therefore, in the process of development, countries always strive to improve their investment environment to meet the expectations better, this can help to promote strong investment However, due to specificity, different types of businesses also have different motives and expectations when deciding on an investment Since then, the improvement of investment environment has become complicated when taking into account both general and moderate factors to satisfy the differences between the businesses that need support Meanwhile, small and medium enterprises (SMEs) in very large numbers appear in almost all geographical areas and these business sectors always occupy the key position of the economy Therefore, the process of improving the current investment environment of all countries is interested in promoting investment, increasing business efficiency and competitiveness of these enterprises As a prominent issue today, the investment environment in developing countries is affected by incompletion state management mechanisms, lacking of infrastructure and along with incomplete, unstable and difficult to predict polices and legal frameworks A lot of research has focused on the investment environment context between countries, they made concentration in improving investment environment to attract foreign investment Although making an important contribution, they even provide core information to help countries create an attractive investment environment, but changes at the national level to attract foreign investment are not quite suitable and enough to stimulate investment by domestic enterprises, especially SMEs with many different characteristics In this context, it is necessary to consider at a more specific level, such as in a country to provide effective information for investment environment upgrading activities (Meyer, 2004) In Vietnam, the investment activities of Vietnamese enterprises create many jobs to help control unemployment while contributing to improve income as well as mobilizing and promoting idle resources in society The Vietnam legal system and policies which support investment for SMEs have been gradually improved, partly encourage enterprises have motivation and expectation to build and implement investment decisions increasingly strong The most obvious illustration is the total investment capital and especially the number of SMEs increases annually However, in parallel with that, the rate of enterprises facing difficulties in business investment and operation ceasing is also very high, accounting for about two thirds of enterprises that are set up every year This proves that investment activities of SMEs now face many difficulties and obstacles, the sustainable and stable development is being threatened If this situation is not resolved, it can completely create a warning effect of the investment decisions of SMEs Although SMEs are not mentioned directly, the results of some recent studies have suggested the causes of the above limitations, lacking the investment environment is one of them Tuyen T.Q et al (2016); Viet P.H (2013), Thuy & Dijk (2008) report annually on the provincial competitiveness of VCCI Vietnam, which initially pointed out that there are still many aspects of investment environment such as incomplete legal policy corridors, high unofficial fees or difficulties in accessing technology, land, capital and output markets These limitations and shortcomings, let enterprises operate ineffective and unfavorable in terms of competitiveness (Phan Nhat Thanh, 2011) The investment environment may impact on the investment of SMEs in the context of Vietnam's economy, which lacking of specific scientific evidence Improving the investment environment to create an effective support mechanism for SMEs with many characteristics which only from the perspective of differences between countries, or generally for all types of enterprises is very difficult It is important to clarify the relationships of variable investment environment that affect the investment decisions of SMEs within a specific country like Vietnam Thereby, it is possible to correctly and effectively adjust policies to create a better investment environment for these businesses and contributing to promoting economic development This is an important and pressing issue in the development of Vietnam's economy, over time, that problem is not only lost, but on the contrary it becomes more and more urgent Therefore, the topic "The impact of the investment environment on investment decisions of small and medium enterprises in Vietnam" of the thesis is to see whether the decisions of SMEs are really affected by the investment environment and What are the specific influences that have important implications both in theory and practice in the current context in Vietnam 3 Research objectives of the thesis The thesis explores clearly defining components of investment environment, assessing the status of investment environment, investment situation of SMEs in Vietnam At the same time, the thesis measures and analyzes the impact of investment factors on the investment decisions of SMEs From the research results, the author proposes solutions to the investment environment towards promoting investment of SMEs in Vietnam Research questions: 1) What factors of the investment environment can affect investment decisions of small and medium enterprises ?, 2) How current situation of investment environment and investment situation of small and medium-sized enterpries in Vietnam are ?, 3) How does the investment environment affect investment decisions of small and medium enterprises in Vietnam ?, 4) How does Investment environment need to be improved to promote small and medium enterprises in Vietnam to invest more strongly? Subjects and scope of research The research object of the thesis is the investment decision of SMEs in Vietnam and the impact of investment environment on the investment decisions of SMEs The thesis focuses on the external investment environment factors, considering their impacts on investment decisions (in the field of development investment) of domestic SMEs Subjects of the survey are the owners and directors of SMEs The thesis is carried out from 2014 to 2017 New contributions of the thesis The thesis has systematized and clarified the content of investment environment, from each component element has been identified, the thesis clearly shows the ability of investment environment to influence investment decisions of SMEs The results of empirical research contributed to strengthen the theory as well as new discoveries: First, the detection and the formation of new independent variable scale is the "administrative management efficiency" of the administrations showed that the investment environment with the investment decision of SMEs is considered by component concepts instead of concepts as originally planned Secondly, the thesis assessed the level of influence of investment environment elements to the investment decisions of SMEs in Vietnam Achievements and limitations in improving investment environment are clearly analyzed and related to the investment transformation of SMEs This result provided orientations and warnings on key issues to be addressed to improve investment environment effectively, helping SMEs to overcome difficulties, barriers and continue to increase investment The direction and levels of influence of factors on SME investment decisions in Vietnam have been clearly established after empirical research was completed This helps policymakers have information, firm foundation and ensure science in establishing and improving investment environment to promote investment more effectively, contributing to the implementation of the economic goals of the country as well as of the localities in the country Thesis structure The whole research content of the thesis includes 04 chapters: Chapter 1: Overview of research works and research methods; Chapter 2: Rationale for the impact of investment environment on the investment decisions of small and medium enterprises; Chapter 3: The reality of the impact of investment environment in the investment decisions of small and medium enterprises in Vietnam; Chapter Solutions to improve the investment environment to promote the investment of small and medium enterprises in Vietnam CHAPTER OVERVIEW OF THE THESIS AND RESEARCH METHODOLOGY 1.1 The thesis overview 1.1.1 Overview of investment environment Some researches considered investment environment to be an independent multi-factor set that reflects comprehensively the initial environment such as: Tidiane kinda and colleagues (2011); David Dollar et al (2004), Lauren M Phillips (2006) Meanwhile, a number of studies have combined the variables of investment environment into groups of component indicators, especially those related to enterprises investment decisions such as Li and Li (1999) ), Stern (2002), Chin-Shan Lu et al (2006) From assessing the advantages and disadvantages of the approaches, the author has chosen to approach the investment environment under main elements, including: 1) Politics - law; 2) Infrastructure; 3) Cost; 4) Market; 5) Social culture 1.1.2 Overview of foreign researches 1.1.2.1 Politics - law Hallward-Driemeier et al (2006), Kaufmann et al (2008) argued that political institutions directly influenced the establishment and maintenance of a stable legal system and thus had the same impact on the enterprise's decision to invest Schneider and Frey (1985), Henisz (2000), Hallward-Driemeier et al (2006) assessed political institutions have a stronger influence on corporate investment decisions, institutional instability is a type of risk, and therefore businesses will decide to invest in a certain country based not only on wealth with a large population but also on the fact that in that country there are reliable political principles or not 1.1.2.2 The infrastructure There are quite a number of studies recognizing that infrastructure plays a major role in promoting enterprises to make investment decisions such as Root and Ahmed (1979), Wheeler and Mody (1992), Dunning (1981, 1988,1993), Chin -Shan Lu et al (2006), David Dollar et al (2005), Ching-Chiao Yang (2006), Mary Hallward-Driemeier (2006), Khalid Sekkat (2007), AJKhadarool and B Seetanah (2010) and many other studies Enterprises will decide to invest when they are satisfied and find that the place where the investment is expected to have more advantages in infrastructure than other locations 1.1.2.3 Cost Wu and Strange (2000), Oum and Park (2004), Graeme Newell and Ross Seabrook (2006); Mebratu seyoum and Jihong Lin (2015) argued that the prices of labor and prices of other inputs such as land, energy, raw materials, and transport are important so that investors must consider before decide whether to invest or not High costs have a negative impact on investment decisions, due to the impact of cost factors to the investment intentions of enterprises, the authorities need to provide inputs such as land and high quality labor to motivate investors 1.1.2.4 Market According to Ekrem and Keith (1998), Oum and Park (2004), Chin-Shan Lu et al (2006), Buckley et al (2007), factors such as market size, market growth potential, the level of competition, economic growth in the place of investment played a positive role to attract investors 1.1.2.5 Social culture According to Jose et al (2007) and a number of other studies, sociocultural factors, including: 1) Living standards and public services; 2) The attitude of the local community for enterprises; 3) Cultural similarity is a significant factor affecting whether an enterprise decides to invest in a locality or not The proximity to social culture is an advantage compared to other businesses in the area where the investment is expected It is an important factor that facilitates the acceleration and rationalization of the transfer and assimilation of technological systems, knowledge and management for enterprises to make investment 1.1.3 Overview of studies in Vietnam In Vietnam, very few studies directly mentioned how investment decisions of SMEs are affected by investment environment, most of the research aimed at overall businesses in general or focused on foreign direct investment enterprises as competitiveness report (VCCI); Phan Nhat Thanh (2011); Viet, P.H (2013) Hoa & Lin (2016) Route T.Q et al (2016) There are several studies discussing the impact of investment environment on the investment decisions of enterprises, including a few studies on SMEs such as Le Hoang Ba Huyen (2012); Le The Phiet (2012), Hoa & Lin (2016), Le Lu LAN (2017) have shown that the investment decisions of businesses are affected by both internal factors and factors outside the enterprise 1.1.4 General assessment and research gaps Previous studies have focused on reviewing investment environment of countries in a region or a group of countries to assess their impact on enterprises deciding to invest in a country These research results not provide many concrete results to realize which aspects of investment environment play an important role in the investment decisions of enterprises within a country - The researches are mainly concerned with the foreign direct investment enterprises or overall businesses in general SMEs have many specific characteristics, so applying the above research results in practice may not be entirely appropriate A small number of studies on SME investment decision making have just stopped in one or a few aspects of investment environment, so it is not enough to make a general conclusion about the role and influence of the investment environment for investment decision making of SMEs Different perspectives exist about the role investment environment factors in investment decisions At the same time, the use of evidence from studies in other countries may not reflect accurately when considering the context of Vietnam's economy, a developing country along with a Socialist-oriented market economy 1.2 Research Methods 1.2.1 Research process The main steps to accomplish the objectives of the thesis include: Determining the groups of factors of investment environment, building scales, preliminary research, qualitative research, quantitative research and finally proposing solutions 1.2.2 Models and research hypotheses From other theories and related studies, to conduct research on the impact of the investment environment on the investment decisions of SMEs in the context of Vietnam, the author has expected the research model with dependent variables is the investment decision of an enterprise under the influence of investment environment represented by five independent variables including: Politics, law; The infrastructure; Cost; Market and Social Culture Together with 05 research hypotheses corresponding to these variables 1.2.3 Investment environment scale Political-law: Political-legal variables in an investment environment reflect the factors related to the formation, maintenance and ability to implement common frameworks, which are mandatory for businesses in investing activities Based on Chin-Shan Lu et al (2006); Sun et al (2002); Dollar et al (2005) and some other studies have described this variable, the legal political scale will consist of 12 observed variables Infrastructure: From the approach point of view, this is the technical infrastructure, reflecting the conditions that businesses can access the input, the output market and the ability to operate production According to Galan et al (2007); Chin-Shan Lu et al (2006); Sun et al (2002) Infrastructure will be measured by observed variables: Cost: Factors that reflect the cost of approaching and using the main input resources of the business Costs can be measured by observations Market: a factor that expresses the ability and potential of consuming output products, directly related to the target market of the enterprise Market variables are expected to be measured by observations Social culture: Reflecting the ability of enterprises to adapt to culture at the place where enterprises invest, is measured by observations 1.2.4 Sample and research methods In order to achieve the objectives, the thesis used a combination of qualitative research methods and quantitative research methods Qualitative research method: With qualitative research method, the author has used the in-depth interview technique with the content prepared in advance with the variables, the observations developed from the research review process with the item destination check and complete the scale In-depth interviews were conducted with 15 subjects, including 10 SMEs managers and 05 expert subjects Quantitative research methods are conducted through two steps: Preliminary quantitative research: Preliminary assessment of the reliability of scales and adjustments to build a complete set of scales before official quantitative research The sample size used by the author is 72 Official quantitative research: For the purpose of providing evidence and answering research questions Selected samples included 231 enterprises in provinces / cities in the survey are Hanoi, Hai Duong, Hai Phong, Quang Ninh and Ha Giang The regression equation is expressed in the following equation: Y = β0 + β1.PL + β2.I + β3.C + β4.M+ β5.SC + In this equation, the dependent variable Y is the "Investment decision of SMEs"; independent variables: PL, I, C, M,SC in turn correspond to Politics Law, Infrastructure, Cost, Market and Social Culture β0 is the coefficient of freedom, βi is the regression coefficient that needs to be estimated to measure the impact of the investment environment variable in the investment decision of SMEs and ultimately the random error CHAPTER THEORETICAL BASIS OF INVESTMENT ENVIRONMENT TO INVESTMENT DECISIONS OF SMALL AND MEDIUM ENTERPRISES 2.1 Investment environment and the necessary of improving the investment environment 2.1.1 Investment environment concept From the research perspective of the thesis, the author has drawn the concept that investment environment is a combination of factors outside the enterprise, where the business is operating or expected to invest, investment environment created advantages or difficulties for The process of implementing 10 and operating investment activities therefore a consequence, therefore it will affect the investment decision of the business 2.1.2 The factors that constitute the investment environment Investment environment is made up of many factors, Chin-Shan Lu et al (2006), Galan et al (2007) and many other scientists have established groups of components of investment environment on the basis of their ability to influence to the responsiveness and potential profitability of the business The thesis also uses this approach, whereby, investment environment includes the following main elements: Politics-law; The infrastructure; Cost; Market and Social Culture 2.1.3 The necessary to improve the investment environment A good investment environment promotes investment and opens a premise to promote production, develop a range of low-cost goods and services, create greater consumer benefits At the same time, it also supports the government's budget by sustainable tax revenues to finance other important social goals such as investment in health, education and other welfare policies Therefore, the improvement of investment environment is necessary, but the ability to improve investment environment also depends on many factors such as: Natural conditions; Political institutional characteristics and economic development strategies and policies of the country and the locality; Cultural characteristics; The status of economic integration and Finally is the ability of the government 2.2 Investment decision of small and medium enterprises 2.2.1 Some basic issues about small and medium enterprises The criteria for classification of SMEs can be classified into two groups: Quantitative criteria and Qualitative criteria The current classification of SMEs in Vietnam is basically based on the size of the capital and the annual average number of employees of each enterprise, have additional industry criteria It means that basically according to quantitative criteria The role of small and medium enterprises SMEs have great contributions to the production and supply of goods to society The main roles of widely recognized SMEs include Promoting economic growth; creating jobs, gathering small and idle capital sources Characteristics of small and medium enterprises SMEs have a number of characteristics that are relatively easy to set up, which are diverse, flexible and widely distributed throughout the economy SMEs also have their own limitations, notably resources constraints and difficulty, especially the capital Countries that support SMEs are based on the principle of promotion and especially in particular to remove difficulties and limitations as mentioned above 2.2.2 Some theories about investment decision making process Eclectic theory: Dunning's eclectic theory (1980, 1988, 1993) is considered a fundamental theory for empirical research on investment decision making, providing general concepts as well as shaping the factors which explain the reasons for investment decisions of businesses Accordingly, three potential advantages serve as an incentive for businesses to decide to invest in a certain location, including: (1) Ownership advantages; (2) Internal advantage and (3) Location advantage The theory of institutions underscores the influence of government by establishing rules and rules for the behavior of different subject in economic and social life In addition, a number of other theories can explain business investment decisions such as optimal choice theory, local marketing theory 2.2.3 Investment decisions and differences in investment decisions of small and medium enterprises Concept of investment and development investment It can be understood that investment is the process by which businesses use their resources to achieve beneficial outcomes or achieve a range of desirable goals Development investment is the use of current capital and other resources to maintain activities and increasing new assets, improving the state of technology, quality of human resources and thereby improving capacity business production of enterprises Development investment is always associated with the construction of new buildings or it can also be the production of new products and services, improving peoples' lives The nature of investment decisions The investment decision is essentially a form of governance decision, which is the process that senior managers based on both internal and external factors to make a variety of decisions such as decisions whether to invest or not, where to invest, what areas and scale of investment, all these decisions always come with the enterprise having to spend an additional cost at the present in order to gain greater benefits in the future, therefore after all, it is the decision on the amount of invested capital to be deployed Factors affecting investment decisions 11 12 Based on previous theories and results of relevant studies, it can be seen that the investment decision making process is influenced by the combination of many factors, including the internal and external factors of enterprises The above mentioned factors are actually a set of factors that constitute investment environment Since then, the potential advantages from the investment environment will have an important impact on the expected investment and business performance and are considered an intangible asset for investors when they decide to invest in a local or national or not Some differences in investment decisions of small and medium enterprises The investment decisions of SMEs have noticeable differences compared to other types of businesses It can be summarized through a number of key points such as: Investment decisions in capital scarcity and difficulty in accessing official capital sources; Investment decisions are accompanied by small and odd capital sizes that lack strategicity; Missing information; Being spontaneous and less sustainable; Less emphasis on investment in technology 2.3 The impact of the investment environment on investment decisions of small and medium enterprises Politics -law: Enterprises must base on political and legal factors to know what they can or not The addition and changing of these factors may occur when relevant organizations wish to orient investment activities to achieve specific economic, political and social objectives Therefore, this is a factor that can influence investment decisions through a number of key aspects such as political stability, legal system, preferential policies and public services to support investment, effective administrative administration Infrastructure: Infrastructure such as transportation, improved energy development has created better conditions for businesses to easily access the input and output markets, as well as conditions to maintain product stability export, cut business costs Since then, it is possible to stimulate investment decisions of enterprises, in other words, an investment environment ensure the availability of quality infrastructure will have a positive impact on investment decisions Cost: For SMEs, cost becomes more important, not only by relying on simple revenue and cost forecasts, their ability to mobilize capital are very limited Market: The market is the base of ideas and investment opportunities, a condition to maintain the continuity of business and production activities In general, market size and development potential are important factors to stimulate investment If the output market is stable and has the potential to expand, it will help reduce the challenges and difficulties in product consumption, help businesses expand the market to seek profits and vice versa Social culture: Culture forms the basis of a society, is able to lead change and dominate the process of change in political, legal, technological acquisition, economic conditions, the cultural transformation in a locality can set a series of opportunities as well as challenges for businesses 2.4 Practical experience and lessons for Vietnam in improving investment environment to promote the investment of small and medium enterprises Japan, China and South Korea are certain countries that have had certain successes in improving the efficiency of their investment in boosting the investment of SMEs These countries all take concrete actions to empower businesses to invest, from thinking to supporting core issues such as management experience, building strategies; Regarding financial support, tax reduction, labor training Some lessons learned for Vietnam, such as improving investment environment, need to pay attention to the practical and core contents of SMEs' investment activities; Increasing professionalism, consistency and smoothness in operation, implementing support policies among relevant agencies; Need to concretize support content, support level for specific objects; To adopt policies to reasonably prioritize prospective, more efficient or priority investment enterprises according to regions and industries with particularly difficult conditions to be developed; Accurately grasp and timely solve obstacles between businesses and organizations implementing policies on investment environment CHAPTER THE CURRENT STATUS OF THE INVESTMENT ENVIRONMENT AFFECTING TO INVESTMENT DECISIONS OF SMALL AND MEDIUM ENTERPRISES IN VIET NAM 3.1 Overview of small and medium enterprises in Vietnam in the 2006-2017 period Along with the economic growth in Vietnam were positive changes, increasingly strong development of SMEs If there were only 125.1 thousand enterprises in 2006, then by 2017, the number of SMEs reached over 508 thousand enterprises The number of newly established SMEs was also very 13 14 close in the last years, ranging from 72,597 thousand enterprises (in 2014) to 106,797 enterprises (in 2016) The total capital of the entire SME sector was increasing every year, from VND 954.4 trillion in 2006 to an increase of approximately 20 times to over VND 19.4 million However, the development of Vietnamese SMEs has more or less shown spontaneity, lack of efficiency and sustainability Notably, the smaller the enterprises, the greater the loss rate Every year, the number of SMEs ceases which is equivalent to about 70% of the number of SMEs registered for establishment 3.2 Current status of investment environment and the impact of investment environment on investment decisions of small and medium enterprises in Vietnam 3.2.1 Investment environment in Vietnam The investment environment in Vietnam has had more positive changes, some of the most positive changes have been drawn, including Regarding legal politics, Vietnam maintains good stability of socialpolitical security, legal system and investment-related sub-law documents Regarding infrastructure, Vietnam continuously spends a high proportion of investment in infrastructure, total investment capital for transport, telecommunications, electricity, gas and water supply accounts from above 10.3 % Of GDP / year A series of important projects such as transportation, energy are implemented and promoted effectively in practice, this helps to improve Vietnam's global competitiveness from ranking 75 in 2012 to 55 in 2017 In terms of cost, with the spirit of serving businesses, encouraging investment, Vietnam has many policies and actions towards the goal of how to cut the most of costs for businesses such as leasing and using land and capital mobilization costs; Transportation costs, Labor costs and electricity costs Regarding the market, in addition to the advantages of large market size and market growth rate, the government and organizations also have many support activities such as national trade promotion programs, fairs and exhibitions, trade promotion for the business community, 90% of participating enterprises are SMEs 3.2.2 Investment situation of small and medium enterprises The scale of annual investment The scale of investment capital for SMEs from 2006 until now has generally increased, averaging over VND 558 trillion annually From VND 79.6 trillion in 2006, the total investment capital in 2017 reached VND 455.9 trillion In particular, small businesses always accounted for the largest proportion of investment capital with about 58.4% of the total investment capital of the entire SME sector In terms of regions, the majority of SMEs' investment capital is contributed by non-state enterprises, corresponding to a rate of over 60%, followed by the foreign-invested enterprises, SMEs in the state sector According to the business sector, the SMEs in the construction industry contribute a large amount of investment annually, with a ratio of 56.3% to 95.4% of the mobilized capital of SMEs The service sector tended to fall sharply in years from 2013 to 2015 Capital structure of SMEs From 2006 up to now, the ratio of equity capital of enterprises over the years has gradually decreased, the self-financing coefficient from 43.9% in 2006 to 33.4% in 2017, it means that capital was mobilized from other sources have increased Accordingly, in 2006, a capital of SMEs had 0.561 dong of capital, which was the contribution from creditors, then by 2017, in each investment capital that enterprises made, creditors contribute 0.666 dong Business investment results In terms of absolute numbers, the profit before tax of SMEs has increased over the years, but the growth rate of profit is smaller than the growth rate of capital, equity and revenue In general, the investment situation of SMEs is much more difficult, the benefits to investors are being reduced 3.2.3 The impact of the investment environment on investment decisions of small and medium enterprises 3.2.3.1 Positive effects from investment in SMEs' investment decisions Firstly, the stability of political institutions and especially the improvement of the legal system and SME support policies, concretized in many aspects which has strengthened the confidence and optimism for enterprises making investment decisions to exploit business opportunities Secondly, accessing the ability of infrastructure, labor and land were improved, contributes to the business needs of businesses that also bring positive effects Thirdly, Vietnam has established a financial support system for SMEs Not only commercial banks, but also investment funds, funds to support SMEs at all 15 16 levels are the basis for businesses to approach and solve the need for capital, a difficult problem that Vietnamese SMEs have ever come to now always face Fourthly, the general level of the cost of using infrastructure and other inputs in Vietnam is relatively stable, along with some effective support policies such as policy implementation Tax incentives, land rental costs, business premises and wage labor policies are favorable conditions for businesses to reduce investment costs at startup as well as reduce production costs and product costs help increasing the competitiveness of businesses 3.2.3.2 Negative effects from investment environment to investment decisions of SMEs Firstly, many policies and incentive programs from the government and local governments diverge from the ability to access and benefit SMEs Secondly, ineffective in facilitating investment capital, the mobilization rate from informal credit sources is very large, which will cause difficulties in stability, interest expense Thirdly, the orientation and support of the output market is still weak, causing many enterprises to lack information to follow unproven market demands, leading to unsold goods that cannot be consumed Fourthly, the policy of training, supplying and using labor has not kept pace with the reality, SMEs must accept the use of nearly 75% of the labor force who have not undergone technical and professional training (Cao Sy Kiem, 2013 ) is clearly a big difficulty in labor performance and business efficiency Fifthly, the level of science and technology is low, Vietnamese SMEs face increasingly fierce competition of enterprises from the big economies with high technology and management level It is a severe and heavy challenge for SMEs which are weak in innovation capacity and backward technology 3.3 Experimental results of the impact of the investment environment on investment decisions of small and medium enterprises in Vietnam 3.3.1 Results of qualitative research Test results of independent variables: Based on the results of qualitative research, Political-legal factors, infrastructure, costs, markets and social culture can be used to determine and predict investment decisions of SMEs Therefore, the preliminary research model will be used to conduct research Results of scale evaluation Basically, the scale of the survey objects understands the meaning correctly and can be answered easily In addition to the comments on the expression, the linguistic structure of some variables, there are only a few minor issues for some observations on the political-legal and social-cultural variables Therefore, the basic scales will be preserved to be included in the detailed questionnaire in quantitative research after a few minor adjustments in the scale of Political-legal and social-cultural variables Words and expressions of some observed variables are also reviewed to be more appropriate The results of the dependent variable test Comments are correctly understood and ensured about the ability of enterprises to make investment decisions Adjusting and encoding the scale Specifically, after the qualitative research step, the set of scales is composed of independent variables which are used to analyze the impact of investment in the investment decisions of SMEs In particular, political-law variables include 10 observations, independent variables, each of which is measured by observations This scale will be used for quantitative research sections (see Appendix 06 for details) 3.3.2 Preliminary quantitative research results In the preliminary quantitative study, the scale continued to be assessed for reliability through Cronbach’s Alpha coefficients with data from 72 questionnaires obtained from the survey subjects In the results, the Cronbach’s Alpha reliability coefficient for all scales are greater than 0.7 The correlation coefficients are greater than 0.3 The scales generally guarantee reliability for use in official quantitative research 3.3.3 Results of official quantitative research Based on the data set from 231 valid responses from the official investigation, quantitative research studies conducted, the main results are as follows: Evaluating the reliability of the scale All scales have Cronbach’s Alpha confidence coefficients ranging from 0.780 to 0.875 and the correlation coefficients are greater than 0.3 Validating the value of the official scale by exploratory factor analysis (EFA First EFA result: From the first 30 observed variables, factors were extracted, the total variance explained when the factor group was drawn was 67,088 (> 50%) Factor value loading received of all the observed variables are greater than 0.5, except for the fourth observed variable of the market variable 17 18 (TT_4) of 0.436, which also meets the requirement as greater than 0.3 Particularly for Political-legal variables, the study has made noticeable findings, 10 political measurement criteria - the law is loaded into different factors Therefore, theoretically, these 10 observed variables measure the concept of Politics-law, but in fact in Vietnam, they are separated into two separate concepts Reference some previous studies such as Thuy & Dijk (2008); Chin-Shan Lu et al (2006); David Dollar et al (2005); Wei (2000), the author named this new variable "administrative governance effectiveness", It does not reflect problems in the formulation and issuance of legal and policy documents, but the internal function is the deployment process, perform with the right nature as committed to those documents or not The results of the second EFA re-run: Results of KMO and Bartlett tests still ensure that the variables are related to each other and are qualified to conduct exploratory factor analysis with KMO results = 0,759, Bartlett testing for Sig value is 0,000 From the original 29 observed variables, factors were extracted, the total variance explained when the factor group was extracted was 64,788 (> 50%) Factor values loading the lowest is 0.425 (TT_4), meeting the required standard The results of testing the impact of the investment environment on the investment decisions of small and medium enterprises Results of hypothesis testing: Firstly, the study examines the relationship of independent variables with the dependent variable of investment environment without the participation of control variables Then, the research continues to consider the role of control variables when participating in the model There are all three control variables selected: Type of business, number of years of operation and size of investment capital Results of accreditation of regression models: There is enough basis to assume that there are out of groups of factors of investment environment that affect the investment decisions of enterprises Among them, there are positive influences, including: Political law, Administrative management efficiency, Infrastructure and market There is another factor that negatively influences SMEs' investment decisions At the same time, all the models result that there is not enough basis to conclude that cultural and social factors positively affect the investment decisions of enterprises Regarding the explanatory level of each model, it can be seen that the regression model 05 obtained the adjusted R2 coefficient of 0.420, the largest in the models, that would better explain the variation in the investment decisions of the business (Explain 42% of the variation of investment decision variable) Therefore, the results of model are selected to demonstrate the impact of investment in the investment decisions of SMEs in Vietnam Results of verification of research models Variables and parameters Accreditation Factors (standardized) Model 3: Overall control Model 4: model (5): Model 1: Model 2: the controlling There are No control Control number the size of three variables the type of of the control business operation business variables years 149* 132* 121* 155** 121* Politics - Law Administrative management 296** 289** efficiency Infrastructure 296** 318** Cost -.200** -.224** Market 213** 190** Socialcutral -.022 001 Business types -.107 Operation years Capital Adjusted R Square 365 355 Durbin-Watson 1.781 1.814 Fchange 21.446 19.093 Sig 0.000 0.000 - Dependent variable: Investment decision of SMEs ** Correlation is significant at - * Correlation is significant at 0.05 level (2 sides) .293** 266** 267** 306** -.205** 165* 008 287** -.199** 200** -.018 310** -.218** 150* 020 -.063 187** 160** 420 1.810 19.538 0.000 228** 396 1.822 22.514 0.000 0.01 207** 388 1.762 21.810 0.000 level (2 sides) From the results of the regression model 05, the estimates of the parameters of the relationship between the investment environment variables and control variables show that the relationships between the Political-legal 19 20 variable and the Market are statistically significant at p