IDEAS home Printed from https://ideas.repec.org/p/gpe/wpaper/14158.html
   My bibliography  Save this paper

A spatial regression approach to FDI in Vietnam: province-level evidence

Author

Listed:
  • Esiyok, Bulent
  • Ugur, Mehmet

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 percapita 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

  • Esiyok, Bulent & Ugur, Mehmet, 2015. "A spatial regression approach to FDI in Vietnam: province-level evidence," Greenwich Papers in Political Economy 14158, University of Greenwich, Greenwich Political Economy Research Centre.
  • Handle: RePEc:gpe:wpaper:14158
    as

    Download full text from publisher

    File URL: http://gala.gre.ac.uk/14158/1/14158_UGUR_Spatial_Regression_Vietnam_2015.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pham, Thai-Hung & Reilly, Barry, 2007. "The gender pay gap in Vietnam, 1993-2002: A quantile regression approach," Journal of Asian Economics, Elsevier, vol. 18(5), pages 775-808, October.
    2. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Firms in the European Union," Sciences Po publications info:hdl:2441/10192, Sciences Po.
    3. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May.
    4. Amy Y. C. Liu, 2006. "Changing wage structure and education in Vietnam, 1992-98," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(4), pages 681-706, October.
    5. Urata, Shujiro & Kawai, Hiroki, 2000. "The Determinants of the Location of Foreign Direct Investment by Japanese Small and Medium-Sized Enterprises," Small Business Economics, Springer, vol. 15(2), pages 79-103, September.
    6. Shujiro Urata & Hiroki Kawai, 2000. "The Determinants of the Location of Foreign Direct Investment by Japanese Small and Medium-sized Enterprises (in Japanese)," Economic Analysis, Economic and Social Research Institute (ESRI), vol. 158, pages 3-21, January.
    7. Du, Julan & Lu, Yi & Tao, Zhigang, 2008. "Economic institutions and FDI location choice: Evidence from US multinationals in China," Journal of Comparative Economics, Elsevier, vol. 36(3), pages 412-429, September.
    8. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 77-104, February.
    9. Matthew Cole & Robert Elliott & Jing Zhang, 2009. "Corruption, Governance and FDI Location in China: A Province-Level Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 45(9), pages 1494-1512.
    10. Baltagi, Badi H. & Egger, Peter & Pfaffermayr, Michael, 2007. "Estimating models of complex FDI: Are there third-country effects?," Journal of Econometrics, Elsevier, vol. 140(1), pages 260-281, September.
    11. Christopher F Baum, 2006. "An Introduction to Modern Econometrics using Stata," Stata Press books, StataCorp LP, number imeus, April.
    12. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Investment in the European Union," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 959-972, November.
    13. Harry Seldadyo & J. Paul Elhorst & Jakob De Haan, 2010. "Geography and governance: Does space matter?," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 625-640, August.
    14. Svetlana Ledyaeva, 2009. "Spatial Econometric Analysis of Foreign Direct Investment Determinants in Russian Regions," The World Economy, Wiley Blackwell, vol. 32(4), pages 643-666, April.
    15. Cletus C. Coughlin & Eran Segev, 2000. "Foreign Direct Investment in China: A Spatial Econometric Study," The World Economy, Wiley Blackwell, vol. 23(1), pages 1-23, January.
    16. repec:spo:wpecon:info:hdl:2441/10192 is not listed on IDEAS
    17. Blonigen, Bruce A. & Davies, Ronald B. & Waddell, Glen R. & Naughton, Helen T., 2007. "FDI in space: Spatial autoregressive relationships in foreign direct investment," European Economic Review, Elsevier, vol. 51(5), pages 1303-1325, July.
    18. Matsuura, Toshiyuki & Tanaka, Kiyoyasu & Urata, Shujiro, 2010. "The determinants of offshore production by Multinational Corporations (MNCs) : a comparison of Japanese and US MNCs," IDE Discussion Papers 234, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    19. repec:wsi:serxxx:v:57:y:2012:i:04:n:s0217590812500154 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gpe:wpaper:14158. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nadine Edwards). General contact details of provider: http://edirc.repec.org/data/pegreuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.