Structure or dynamics? Assessing the attractiveness of water infrastructure investment using panel variance decomposition: A case study in the Mekong Delta region

Comparing sub-national conditions for private water investment is difficult because comparable longitudinal data are scarce and the relevant conditions span market, infrastructure, business-environment, and service dimensions. This study constructs an exploratory, proxy-based Private Investment Attractiveness Index (PIAI) from a balanced panel of 54 area-year observations covering six Mekong Delta areas in Vietnam from 2016 to 2024. Six indicators are normalised across the pooled panel and combined using CRiteria Importance Through Intercriteria Correlation (CRITIC) weights. A post-index procedure applies the Mundlak transformation followed by Shapley-Owen variance attribution, while stochastic multicriteria acceptability analysis (SMAA-2) evaluates ranking sensitivity to weight uncertainty. Urban Population contributes the largest share of PIAI variance (25.51%), primarily between areas (17.92 percentage points). Access to Land (19.09%) and Water Coverage (16.46%) are also between-dominant, whereas Government Support, gross regional domestic product (GRDP) Growth, and Infrastructure Quality are within-dominant. Under the baseline, overall PIAI variance divides almost evenly between between-area (50.47%) and within-area (49.53%) sources. SMAA-2 supports broad regional tiers rather than a rigid six-way ordering. The framework supports first-stage screening of water-supply markets before project-specific due diligence, helping investors identify locations for further appraisal and provincial authorities separate persistent from time-varying conditions.