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Agglomeration Economies and Location Choices by Foreign Firms in Vietnam

Author

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  • Dinh Thi Thanh Binh

Abstract

This paper studies the effects of agglomeration economies on the location choices by foreign firms in Vietnam. By using a large dataset that provides detailed information about individual firms, the study examines the location choices by 568 newly created foreign firms in 2005 in about 150 different 4-digit industries. This is one of the few studies of agglomeration effects on the location choices by foreign investments in transition economies in general and in Vietnam in particular. The estimates of the negative binomial regression model and the conditional logit model show that agglomeration benefits motivate foreign firms in the same industries and from the same countries of origin to locate near each other. However, the empirical results also indicate that there is competition among provinces in Vietnam in attracting foreign investors, and the locations of Vietnamese firms have no effects on the location decisions by foreign firms in the same industry.

Suggested Citation

  • Dinh Thi Thanh Binh, 2010. "Agglomeration Economies and Location Choices by Foreign Firms in Vietnam," FIW Working Paper series 045, FIW.
    • Handle: RePEc:wsr:wpaper:y:2010:i:045
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    Citations

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    Cited by:

    1. Hecht, Veronika, 2015. "Location choice of German multinationals in the Czech Republic : the importance of agglomeration economies," IAB-Discussion Paper 201519, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    Agglomeration; Location choice; Foreign direct investment;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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