Luận văn thạc sĩ UEH determinants of provincial FDI in vietnam , a cross section data analysis

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UNIVERSITY OF ECONOMICS

HO CHI MINH CITY

VIETNAM

INSTITUTE OF SOIAL STUDIES

THE HAGUE

THE NETHERLANDS

VIETNAM-NETHERLANDS

PROGRAMME FOR M.AIN DEVELOPMENT ECONOMICS

DETERMINANTS OF PROVINCIAL FDI IN VIETNAM:

A CROSS SECTION DATA ANALYSIS

A thesis submitted in partial fulfilment of the requirements for the degree of

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

NGUYEN DAI HIEP

Academic Supervisor:

Dr. NGUYEN VAN PHUC

HO CHI MINH CITY, JANUARY 2011

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DECLARATION

I declare that 'Determinants of provincial FDI in Vietnam: A cross section data

analysis' is my own work, that it has not been submitted for any degree or

examination at any other University, and that all sources used or quoted are indicated

and knowledge by complete references.

January 3, 2011

NGUYEN DAI HIEP

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ACKNOWLEDGMENTS

This thesis would never have been written if had not for the encouragement, support,

and assistance which I received from large number of people.

Specially, I would like to thank my supervisor, Dr. Nguyen Van Phuc, for his

encouragement, kindness, patience and valuable advices, which helped shape and

improve this thesis. I would also like to thank a few anonymous referees and added

explanatory variables who helped me finalize this work.

I would also like to sincerely thank Prof. Dr. Peter Calkins for his honest and valuable

advices from I begin to choose the topic and TRD completion. He is truly a noble

teacher, who soonest feedback and detail instruction during TRD establishing.

I would also like to thank science committee; all the members of the Vietnamese￾Dutch Project for MA programme in Development Economics, University of

Economics-HCMC, VietNam for their support and goodwill, and to all the lecturers,

and also to my friends in the class 15.Thank you a great time!

Last, I want to thank my family members, friends.

Any errors and omissions in this thesis are my sole responsibility.

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TABLE OF CONTENTS

Declaration ......................................................................................... 2

Acknowledgements ........................................................................... -... 3

Table of contents .................................................................................. 4

Table list ........................................................................................... 6

Abstract .............................................................................................. 7

Chapter 1: Introduction ........................................................................ 8

1.1 Problem Statement ........................................................................... 8

1.2 Research Objectives ........................................................................... 8

1.3 Research questions ........................................................................... 9

1.4 Organization of the study ..................................................................... 9

Chapter 2: Theoretical Consideration and Literature Review ........................ ll

2.1. The regional development and competitive regionalism theory ..................... 11

2.2 FDI theories and its applicability ......................................................... 11

2.2.1 Capital Theory ............................................................. _ ....... __ ...... 11

2.2.2 The International Trade Arguments ........................... _ ....................... .12

2.2.3 Market Failures and Industrial Organization .......................................... 13

2.2.4 The Eclectic Paradigm and International Investment Path ......................... .13

2.2.5 Agglomeration Effect. .................................................................... 14

2.3. Empirical studies on the determinants ofFDI. ......................................... 17

2.4. Geographical literature on Vietnam, China and ASEAN countries ................. l9

Chapter 3: Research Model, Data Collection and Variable Description ............ 24

3.1. Model Specification ......................................................................... 24

3.2 Data Collection ............................................................................... 25

3.3 Variables description ........................................................................ 26

Chapter 4: Empirical Estimation and Result ............................................. 34

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4.1 Correlation among explanatory variables ............................................... 34

4.2 Empirical estimation and result. ......................................................... .35

Chapter 5: Conclusion and Recommendation .......................................... .42

5.1 Conclusion and recommendation ........................................................ .42

5.2 Limitation .................................................................................... 43

References ........................................................................................ 45

Appendices ....................................................................................... 49

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• TABLE LIST

Table 2.1: Theory summary .................................................................. 15

Table 2.2: Empirical Study Reading ......................................................... 22

Table 3.1: The implementation value of provincial FDI ................................. .26

Table 3.2: FDI capital of top ten provinces .................................................. 26

Table 3.3: PCI result in 2009 .................................................................. 27

Table 4.1: Matrix of Correlation among explanatory variables ........................... 34

Table 4.2: Regression Results ................................................................. .36

Table 4.3: Top five rank of attracting FDI in Viet Nam ................................... .38

Table 4.4: The rank of infrastructure in 2009 ..................................................... 39

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