How Agency Capacity Shapes a Province's Business Environment
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A province's investment and business environment does not improve on its own — it depends heavily on the institutional capacity of the public administrative agencies that serve investors and enterprises. This study, published in the Journal of State Management, sets out the mechanism linking the two.
Context
Provinces across Vietnam compete to attract investment and to help existing enterprises grow, and the quality of the local investment and business environment is a crucial factor in that development and in the wider socio-economic landscape. But that environment is shaped by many things at once, which makes it hard for provincial leaders to know where to push first.
Among those many factors, one stands out: the institutional capacity of the public administrative service providers that handle investment- and business-related procedures. If the reform effort is to be targeted rather than diffuse, it helps to understand precisely how that capacity translates into a better — or worse — environment for enterprises.
Methods
Rather than testing a new dataset, the study works through a comprehensive analysis and synthesis of existing research on institutional capacity, public administrative service provision, and the provincial investment and business environment, drawing the strands together into a single explanatory account.
Key findings
The provincial investment and business environment is treated as a crucial factor in enterprise development and in the local socio-economic picture more broadly.
That environment is shaped by multiple factors, and the institutional capacity of the public administrative service providers dealing with investment and business is identified as a key determinant among them.
It follows that efforts to improve the investment and business environment should place strong emphasis on strengthening the institutional capacity of these agencies.
The study's contribution is to clarify the mechanism — the pathway by which institutional capacity actually works through to the province's investment and business environment.
Keywords:
Institutional Capacity
Public Administrative Services
Investment And Business Environment
Provincial Governance
Administrative Reform
Link:
Citation:
Le Van Hoa, Diu Duc Ha, Nguyen Quynh Huy (2025). Study on the mechanism of institutional capacity impact of public administrative service providers on the investment and business environment of the province. Journal of State Management, 32(15), 12-21.
