A Spatial Regression Approach to FDI in Vietnam: Province-Level Evidence

Bulent Esiyok and Mehmet Ugur ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Foreign direct investment; spatial dependence; agglomeration; Vietnam (search for similar items in EconPapers)
JEL-codes: C31 F23 R11 (search for similar items in EconPapers)
Date: 2015-11-23, Revised 2015-11-23
New Economics Papers: this item is included in nep-int and nep-sea
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Citations: View citations in EconPapers (4)

Published in Singapore Economic Review 02.62(2017): pp. 459-481

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Related works:
Working Paper: A spatial regression approach to FDI in Vietnam: province-level evidence (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:80254

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