Introduction

Vietnam has been making much progress in different fields including economic growth rate during 30 years since innovation from 1990 to 2016 ranging around an average of 6.66 percent, inflation rate controlled at an acceptable level and growing exports. One of the key factors in this success is policy renovation in public finance. According to new public investment Vietnam Public Investment Law (2014), public investment consists of the following fields: investment in programs/projects developing social-economic infrastructure; investment in serving activities of governmental organizations, political and social-political organizations, both domestically and abroad; investment in supporting supplies of public services and goods; and investment from public investment capital under shares of government in public private partnership projects. This shows that public investment capital is spread across many economic fields. The question proposed here is how the process of public investment restructuring should be effectively conducted when a medium-term plan is still under implementation. However, along with renovations, policies for public investment and capital of public investment face controversial opinions due to the divergence in assessment and results of analysis of its influence on some economic variables. The research of Khan and Kumar (1997), Ramirez and Nazmi (2003), Bukhari et al. (2007) and Haque (2013) showed positive impacts of public investment on economic growth and the research of Cruz and Teixeira (1999), Erden and Holcombe (2005), Gjini and Kukeli (2012) and Dreger and Reimers (2014) also found positive impacts of public investment on private investment. On the contrary, some other studies proved that public investment has no or negative effects on economic growth and creates the situation in which public investment crowds out private investment (Vedder and Gallaway, 1998; Ghani and Din, 2006; Swaby, 2007; Hatano, 2010). In the scope of this paper, the research objective is to assess both short- and long-term influences of public investment on economic growth and test the hypothesis that whether public investment promotes or demotes private investment in Vietnam. From the research findings, the authors expect to give out proper recommendations for public investment restructuring policy in the future period.