Foreign direct investment in provinces: A spatial regression approach to FDI in Vietnam

Bulent Esiyok and Mehmet Ugur (m.ugur@gre.ac.uk)

No 7893, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: Foreign direct investment (FDI) flows into Vietnam have increased significantly in recent years, with unequal distribution between provinces and regions. We aim to contribute to the literature on locational determinants of FDI by accounting for spatial interdependence between 62 Vietnamese provinces from 2006-2009. For this purpose, we estimate a spatial lag model using maximum likelihood estimation method. We report existence of spatial dependence between provinces as well as spatial spill-over effects. The results are robust to different specifications for weight matrices and inclusion of different explanatory variables and/or proxies. We also report that conventional determinants of FDI such as market size, domestic investment, openness to trade, labour cost, education and governance, etc. are significant and remain robust to inclusion of spatial interdependence. The sign of the spatial dependence suggests that the distribution of FDI between provinces is subject to conglomeration effects.

Keywords: foreign direct investment; spatial dependence; conglomeration; Vietnam (search for similar items in EconPapers)
Date: 2011-12-20
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://gala.gre.ac.uk/id/eprint/7893/2/MPRA_paper_36145.pdf

Related works:
Working Paper: Foreign direct investment in provinces: A spatial regression approach to FDI in Vietnam (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gpe:wpaper:7893

Access Statistics for this paper

More papers in Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre Contact information at EDIRC.
Bibliographic data for series maintained by Nadine Edwards (n.c.edwards@greenwich.ac.uk).