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A Spatial Regression Approach To Fdi In Vietnam: Province-Level Evidence

Author

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  • BULENT ESIYOK

    (Faculty of Economics and Administrative Sciences, Baskent University, Ankara, Turkey)

  • MEHMET UGUR

    () (Business School, University of Greenwich, Old Royal Naval College, 30 Park Row, London, SE10 9LS, UK)

Abstract

Foreign direct investment (FDI) flows into Vietnam have increased significantly in recent years and are distributed unequally between provinces. This paper aims to investigate the locational determinants of FDI in 62 Vietnamese provinces and whether spatial dependence is a significant factor that both researchers and policy-makers should take into account. We report that province-specific per-capita income, secondary education enrolment, labor costs, openness to trade, and domestic investment affect FDI directly within the province itself and have indirect effects on FDI in neighboring provinces. The direct and indirect effects coexist with spill-over effects and spatial dependence between provinces. Our findings indicate that FDI in Vietnam reflects a combination of complex vertical and export platform motivations on the part of foreign investors; and an agglomeration dynamics that may perpetuate the existing regional disparities in the distribution of FDI capital between provinces.

Suggested Citation

  • Bulent Esiyok & Mehmet Ugur, 2017. "A Spatial Regression Approach To Fdi In Vietnam: Province-Level Evidence," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(02), pages 459-481, June.
  • Handle: RePEc:wsi:serxxx:v:62:y:2017:i:02:n:s0217590815501155
    DOI: 10.1142/S0217590815501155
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    References listed on IDEAS

    as
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    Cited by:

    1. Toan Thang TRAN & Thi Song Hanh PHAM, 2013. "Spatial Spillovers of Foreign Direct Investment: The Case of Vietnam," Working Papers 12, Development and Policies Research Center (DEPOCEN), Vietnam.
    2. repec:taf:jdevst:v:52:y:2016:i:10:p:1431-1445 is not listed on IDEAS

    More about this item

    Keywords

    Foreign direct investment; spatial dependence; agglomeration; Vietnam;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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