VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES

NONG MINH TRANG

SOLUTIONS TO ENHANCE THE
COMPETITIVENESS CAPACITY OF HA TINH
PROVINCE

Major: Economic Management
Code: 9.34.04.10

SUMMARY OF ECONOMICS DOCTORAL THESIS

HANOI - 2019


The Thesis has been completed at:
GRADUATE ACADEMY OF SOCIAL SCIENCES

The science supervisors: 1. Associate Professor Ph.D Nguyen Dinh Tho
2. Doctor Luong Minh Huan

Reviewer 1: Associate Professor Ph.D Tran Dinh Thien
Reviewer 2: Associate Professor Ph.D Hoang Van Bang
Reviewer 3: Associate Professor Ph.D Le Xuan Dinh

The Thesis will be upheld in front of the Thesis Grading Council at
Academy level in the meeting at Graduate Academy of Social Sciences,
477 Nguyen Trai, Thanh Xuan.
At …...... date…......…month…....….year....…

in order to maximize the internal capacity of local economies, etc.
Ha Tinh is one of provinces at North Central region and Central coastal. It
is a very geographically - politically and geographically -important in the
development of Vietnam, Laos and the Mekong sub-region countries.
Implementing Resolution 02 / NQ - CP of the Government on continuing to
perform key tasks and solutions to improve the business environment and
enhance national competitiveness, Ha Tinh has been implementing many
synchronus solutions to improve competitiveness capacity at the provincial level
to drastically improve the business and investment environment to create
sustainable development. The initial results from the above efforts of Ha Tinh
have rapidly increased the number of newly established enterprises, significantly


2
reduced the rate of enterprises of which operations are dissolved and ceased;
drastically reduced time costs, unofficial expenses for market entry of enterprises
and people; drastically increased the amount of social investment capital in
agriculture, industry and services, etc; especially the provincial government has
made great progress in education, health, culture and society; The life in all
aspects of the people of Ha Tinh is initially improved and enhanced etc.
However, in general, the government of Ha Tinh province has not yet
effectively exploited the geographical advantages in comparision of the high
percentage of high school graduates to develop high qualified human resources;
has not yet effectively exploited the geographical advantage in the absolute
comparison of deep-water seaport and the location of traffic hubs between the
Southern and the Northern of Vietnam and the Mekong sub-region to attract
investment in order to make Ha Tinh become the logistics center of the Central
region; not yet has fully exploited the geographical advantage in comparision of
scenic beauty, marine resources, cultural and historical traditions , etc. in order to
attract investment capital for developing the tourism sector; It has not yet exploited

research questions: (1) Provincial competitiveness capacity, constituent
elements and criteria for evaluating it? (2) Factors affecting the status of Ha
Tinh's competitiveness capacity? (3) Solutions to enhance the competitiveness
capacity of Ha Tinh in the period of 2019 - 2030?
To answer three questions of above research, the Thesis needs to
carry out four following research missions:
Mission 1: Overview research of competitiveness capacity at the
provincial level at domestic and internationally; outlining research gaps related to
competitiveness capacity at the provincial level. Mission 2: Proposing the
concept of competitiveness capacity at the provincial level; identifying the
constituent elements and criteria for evaluating competitiveness capacity at the
provincial level; identifying impacting factors and proposing theoretical models
of factors affecting competitiveness capacity at the provincial level; overviewing
the experience to enhance the competitiveness capacity of some provinces and
give out some lessons learned for the government of Ha Tinh province in the
following period. Mission 3: Applying theoretical models of factors affecting the
provincial competitiveness capacity to analyze and assess the current situation of
Ha Tinh province’s competitiveness capacity; bring out retrictions and their
causes in Ha Tinh province’s competitiveness capacity in the period of 2012 2017, extending for consideration to 2018. Mission 4: Overviewing domestic
and international contexts; offering a number of perspectives, orientations and
goals in order to enhance the provincial competitiveness capacity in the period of
2019 - 2030; Proposing a number of suitable and feasible solutions to overcome
constraints of Ha Tinh's competitiveness capacity in order to enhance the Ha
Tinh's competitiveness capacity in the period of 2019 - 2030.


4
3. Researh object and scope of the Thesis
- Research object is Ha Tinh’s competitiveness capacity at the provincial level.
- Research scope in terms of content: Although there are many actors

the concept of competitiveness capacity at the provincial level, a number of


5
factors that constitute competitiveness capacity at the provincial level and
criteria for evaluating competitiveness capacity at the provincial level. The
ways to approach the research of the concept of competitiveness capacity at the
provincial level, the factors that constitute competitiveness capacity at the
provincial level are always associated with the economic management subject
creating competitiveness capacity which is the provincial government. This is a
completely new research approach compared to previously published ones.
The Thesis proposes a theoretical model of factors affecting competitiveness
capacity at the provincial level which is highly applicable to analyze factors
affecting competitiveness capacity at the provincial level of Vietnam, which
hasn’t been mentioned in previous researches.
6. Theoretical and practical meanings of the Thesis
6.1. In terms of the theory
From the perspective of economic management, the Thesis outlines the
concept of competitiveness capacity at the provincial level, constituent
elements and criteria for evaluating competitiveness capacity at the provincial
level, factors affecting competitiveness capacity at the provincial level;
proposing a theoretical model of factors affecting competitiveness capacity at
the provincial level, the thesis wants to make a small contribution to building a
complete theoretical model of competitiveness capacity at the provincial level
and enhancing competitiveness capacity at the provincial level in Vietnam.
6.2. In terms of practice
In the research scope of the content, the Thesis identifies the economic
management subject creating competitiveness capacity at the provincial level is
the provincial government; therefore the competitiveness capacity of the
provincial government is considered the competitiveness capacity at the

A. Smith was a British classical economist, one of the first scholars to
raise views on comparison advantage and competitiveness. In his famous work,
"An Inquiry into the Nature and Causes of Wealth of Nations" (1776), he argued
that absolutely comparison advantage meaning that a country was a producer with
the lowest cost on that commodity. Since then, he asserted absolute comparison
advantage when being put into the economic cycle would become a competitive
resource to create national competitiveness capacity. D. Ricardo was A. Smith's
outstanding successor as he pointed out the comparison advantage in countries
with open economies that also became an important competitive resource to create
national competitiveness when it was put into economic cycles through foreign
trade activities with other countries around the world. He supposed that relative
comparison advantage should be transformed into each nation's competitive
resources in the process of international trade. After A. Smith and D. Ricardo,
there were many economists researching the comparison advantage as an


7
important competitiveness source creating the competitiveness of each nation and
its localities, in which there was a theory on comparison advantage based on the
H - O model, the theory of P. Samuelson. The author of the thesis acquired the
above-mentioned points of view and classic theoretical methods to in-depth study
on the mechanism of transforming comparison advantage into competitiveness
resources from the perspective of economic management in his research project.
1.1.2 Researches on national competitiveness capacity and local
competitiveness capacity
According to the World Economics Forum (WEF) (1995), National
competitiveness capacity is the capacity of national economy to achieve and
maintain the high growth in economy, income and employment. In addition, WEF
also supposes the national competitiveness capacity as a system of institutions,
policies and determinants to a country's productivity level, etc. In other words,

and capacity into competitiveness advantage
The theory of resources supposes that the competitiveness resources of
enterprises are the decisive factors for the transformation into the competitiveness
advantage and business performance of enterprises. This theory has divided
competitiveness resources into three types: physical resources, human resources
and organizational resources, etc. Ownership resources are the fundamental
basis for building a business strategy based on valuable, rare, inimitable, nonsubstitutable attributes. To successfully transform competitiveness resources into
competitiveness advantage of enterprises must satisfy the above 4 attributes. The
theory supposes that enterprises need to know how to combine and recombine
competitiveness resources to transform them into competitiveness advantage and
then transform competitiveness advantage into enterprises’ competitiveness
capacity in order to overtake competitors in the industry. The theory about the
capacity states that enterprises 'capabilities are shown in their abilities in using,
combining assets, resources, and capabilities to achieve the organization's overall
efficiency and growth. The concept of capaity is the assumption that, the research
object environment, especially the enterprise environment, is dynamic and
therefore, it is required to build capacity and continuously make full use of the
capacity to transform them into competitiveness advantage. Capacity is


12
understood as the ability to maintain, deploy, coordinate resources and use
resources to help businesses achieve their goals in competitive contexts to
transform them into competitiveness advantage for enterprises. Therefore,
enterprises which want to transform their capacities into competitiveness
advantages, and transform competitiveness advantage into competitiveness
capacity, need to know how to combine resources and capabilities.
2.1.1.3. The theory of transforming competitiveness advantage into
competitiveness capacity
M. Porter (1985, 1998) was one of the authors discussing a lot about the

2.1.2.2. Expressing the concept of provincial competitiveness
capacity at the provincial level and explaining the terms
From the theory of the transformation of competititveness advantage
into competitiveness capacity and the transformation of resources and
capacity into competititveness advantage, from the perspective of economic
management, the thesis expresses the concept of competitiveness capacity of
the provincial government as follows: competitiveness capacity of provincial
authority is the capacity to exploit, attract and transform resources in the
form of potentiality into the province's competititveness advantage and the
ability to effectively use competititveness advantage to overtake other
provinces in socio-economic development activities.
From the viewpoint of economic management, in the sense of the verb,
the “Enhancing” term in the phrase "Enhancing competitiveness capacity at the
provincial level" is understood as the operation of the provincial government,
making the province's competititveness capacity better and more highly
effective; It is also the process of making elements constituing competititveness
capacity of that subject more effective and more perfect.
2.2. Components of competitiveness capacity at provincial level
Provincial competitiveness capacity includes: (1) The provincial
government's capacity to exploit, attract and use high-qualified human
resources; (2) The provincial government's capacity to exploit, attract and
use financial investment resources and modern technology; (3) The
cooperation and connection capacity of the provincial government; (4) The
provincial government's capacity to respond to incidents and events; (5)
The provincial government’s creativeness and innovation capacity; (6) The
provincial government’s management and operation capacity.
2.3. Criteria for evaluating competitiveness capacity at provincial level in thesis
Criteria for evaluating acute competitiveness capacity include (1)
Ability to develop high quality human resources; (2) Ability to mobilize
financial resources; (3) Ability to connect and cooperate; (4) Ability to

policy, investment, credit, economic structure. The third is "competitiveness capacity
at the enterprise level" including the business environment, induinry cluster
development level, operations and strategies of enterprises.
(2) Diamond model of M. Porter: including: One is the conditions, existing
input factors; second is the company's structural strategies and competitiveness;
three is demand conditions; four is related and supporting industries.
(3) Triangle Model about competitiveness capacity of Lall,
Abramovitz and his partners including competitiveness capacity in
knowledge, competitiveness capacity in economy and competitiveness


15
capacity in institution. If combining to analyze these three types of capacities
in a whole which was systematic and according to a linear logical manner, it
would form an effectively analytical model of competitiveness capacity with
the name of competitiveness capacity Triangle.
2.4.2.2. Proposing a theoretical model measuring the factors
affecting the provincial competitiveness capacity
From the three theoretical bases mentioned above, the thesis proposes
a theoretical model of factors affecting competitiveness capacity at the
provincial level including 9 factors as follows: (1) Business environment; (2)
Development level of the industry cluster; (3) Business strategic operations;
(4) Social infrastructure (health, education, culture, society); (5) Technical
infrastructure (transportation, electricity, water, telecommunications); (6)
Economic structure, investment, credit and fiscal policies; (7) Geographical
location; (8) Natural resources; (9) Local scale.
Business
environment

Social, health,

level

T6

T9

Geographical location

T7
Natural resources

T8

Source: Author
Figure 2.2: Modeling of hypotheses which are factors affecting the
province’s competitiveness capaity
Y= f(X1, X2, X3, X4, X5, X6, X7, X8, X9)
In which: X1: Business environment factors; X2: Industry cluster
development factor; X3: Strategy and operation factors of enterprises; X4: Factor


16
in social, health, educational and cultural infrastructure; X5: Technical
infrastructure factors (transportation, electricity, water, telecommunications); X6:
Economic structure, credit, investment and fiscal policy factor; X7: Geographic
location factor; X8: Natural resources factor; X9: The factor of local scale (in
terms of area, GDP, population, domestic market, industrial clusters, etc.); Y: the
provincial competitiveness capacity. Assumptions of the model: T1: There is a
positive impact of the business environment on the provincial competitiveness
capacity; T2: There is a positive impact of the development of the industry cluster

capacity to overcome your neighbors to develop socio-economic of the province
and it deserves a position as an and logistics service, industrial center of the North
Central region and Central coastal region. However, Ha Tinh has not exploited all
its inherent potentials and strengths to develop into a trading center of the North
Central region, it hasn’t had the international and regional internal connection and
cooperation, and economic growth is still slow and it is still a poor province, etc.
3.2. Current situation of provincial competitiveness capacity of Ha Tinh
3.2.1. Current situation of the capacity of exploiting, attracting and
using high quality human resources of the government of Ha Tinh province
Current situation of the capacity of exploiting, attracting and using
high-qualified human resources of the government of Ha Tinh province is
assessed through the indicators of ability to attract talents, the HDI, the
results of building and improving the quality of the contingent of cadres, civil
servants and officials. Currently, the percentage of high school graduated
students is 74.3%, significantly higher than the national average, etc. In 2017,
in the total of the labor force who are working and contributing to the
economy, there is 58.7% trained, increased up to 23.2% compared to the
percentrage of 2011, etc.
3.2.2. Current situation of the capacity to exploit, attract and use
financial investment resources and modern technology of the government
of Ha Tinh province
The current situation of this capacity is assessed according to the
indicators of social investment capital in the form of ownership, indicators of
investment capital for all sectors, and Incremental Capital Output Ratio
(ICOR), targets on attracting FDI capital, targets on attracting high-tech
projects, targets on electronic governance, targets on enterprise development,
targets on enterprise support services. In the period of 2012 - 2015, the number
of the realized investment capital of the following timeline compared to the
previous one has increased significantly by 257.36%, of which the outstanding
growth in FDI capital of the following timeline in comparison with the

(%)
Whole country
110.100
126.859
115,2
North Central and
14.825
17556
118,4
Central coastal areas
1.453
3.065
210,9
Thanh Hoa
1.547
1.794
116
Nghe An
734
741
101
Ha Tinh
564
576
102,1
Quang Binh
282
307
108,9
Quang Tri

3.2.5. Current situation of creativity and innovation capacity of
the authorities of Ha Tinh province
Current situation of capacity to creativity and innovation capacity of the
authorities of Ha Tinh province is assessed through the indicators of the number of
established Technology and Science enterprises, the targets on developing the
Technology and Science market, the indicators of dynamism and pioneering of
provincial leaders, indicators of modernization and administrative reform,
indicators of Information Technology infrastructure and Information Technology
applications in governance. In the period of 2012 - 2017, the authorities of Ha
Tinh province were quite interested in Technology and Science activities with 126
equipment and technology transfer contracts implemented with a total value of
821,130 million VND. According to data in the Statistical Yearbook of some
North Central provinces in 2012 and 2015, it shows that Ha Tinh’s increase
number of Technology and Science enterprises and training places is 136.92%;
Nghe An’s is 183.38%; Quang Binh’s is 119%; Quang Tri’s is 204.68%.


20
3.2.6. Current situation operation and management capacity of the
authorities of Ha Tinh province
3.2.6.1. Current situation of serving and construction capacity of
the authorities of Ha Tinh province
The current situation of the serving and construction capacity of the
provincial government is assessed through the indicators of serving and construction
capacity of the provincial government (including publicity, transparency, legal
institutions and order and security, time costs, informal charges). PAPI data show
that this index of Ha Tinh in 2012, 2015 and 2018 shows that: In 2012, in the
Central Coast region (12 provinces), Ha Tinh reached 5.86 points ranking 6th place;
in 2015, it increased by 3rd place and then decrease by 9th (2018); This shows that
Ha Tinh does not have any stability on this indicator.

Restrictions and their causes on the capacity to exploit, attract and use modern
technological and financial investments of the authorities of Ha Tinh province;
(3) Retrictions and their causes on the cooperation and connetion capacity of
the authorities in Ha Tinh province; (4) Retrictions and their causes on the
capacity to respond to incidents and events of the authorities of Ha Tinh
province; (5) Retrictions and their causes on creativity and innovation capacity
of the authorities of Ha Tinh province; (6) Retrictions and their causes on
operation and management capacity of the authorities of Ha Tinh province.
Chapter 4
VIEWPOINTS, ORIENTATIONS AND SOLUTIONS TO ENHANCE
THE COMPETITIVENESS CAPACITY OF HA TINH PROVINCE IN
THE PERIOD 2019-2030
4.1. International and domestic contexts affect the competitiveness of
Ha Tinh province in the period 2019 - 2030
(1) Domestic context affects competitiveness capacity of Ha Tinh province;
(2) International context affects competitiveness capacity of Ha Tinh province.
4.2. Viewpoints and orientations on enhancing the competitiveness
capacity of Ha Tinh province in the period 2019 - 2030
4.2.1. Viewpoints on enhancing the competitiveness capacity of Ha
Tinh province in the period 2019 - 2030
First, the authorities of Ha Tinh province need to strengthen its ability


22
to transform existing advantages into competitiveness advantage and create
new incentives for socio-economic development. Secondly, the authorities of
Ha Tinh province need to connect its role of economic management with the
activity of increasing endogenous capacity of Ha Tinh’s economy. Thirdly, the
authorities of Ha Tinh province need to implement synchronously and
creatively the economic policies of the Central Government into the specific

transforming the economy into digital convergence in the future.
4.4.2. Focus on developing high-tech agriculture towards green agriculture
Ha Tinh should proactively invite for investment in high-tech agriculture
in the direction of green agriculture to develop endemic agricultural products
with high market value and competitiveness capacity in the field of agriculture.
4.4.3. Promote public-private connection and cooperation, multilateral
cooperation to enhance the endogenous capacity of the economy of Ha Tinh
Ha Tinh needs to promote the development of a Public - Private Partnership model (PPP), especially in infrastructure development, in
agriculture and in environmental proesss. In addition, Ha Tinh needs to
strengthen and multilateral connection and cooperation between provinces in
the Central Coast region and international cooperation to enhance the
endogenous capacity of Ha Tinh’s economy in the following time.
4.4.4. Completing the work of predicting and building hypothetical
situations, incidents and events
Predicting and building hypothetical events, incidents and situations
play an important role in effective and timely handling and adaptation when they
occur in reality; thereby helping to enhane competitiveness capacity of Ha Tinh.
4.4.5. Create an ecological environment to develop innovation and creativity
The creativity and innovation capacity of the authorities of Ha Tinh
province is only enhanced, when it is nurtured in an appropriate ecological
environment. Creating an ecological environment for the development and
enhancing the creativity and innovation capacity of the provincial government
will help to develop the province's creativity and innovation activities.
4.4.6. Enhancing the serving and construction capacity of the authorities
of Ha Tinh province
Enhancing the serving and construction capacity of the provincial