[STBI-25-05-2017] Analysis of regional competition for FDI among VIetnam’s provinces during 2011-2014 using Spatial Durbin modeling (SDM)

Presenter: Dr. Nguyễn Lưu Bảo  Đoan (School of Economics – UEH)

Email: doannlb@ueh.edu.vn

Date: 11:00 May 25th, 2017

Venue: H001, 1A Hoang Dieu Street, Ward 10, Phu Nhuan District


Among a plethora of literature of determinants of Foreign Direct Investment (FDI) are few which successfully addressed the concern about connectivity among neighboring jurisdictions or regions. In the context of Vietnam, empirical studies on FDI determinants tend to neglect that spatial interaction among neighboring provinces, which oftentimes leads to inefficient and biased estimations. This current study fills in that gap of knowledge about spatial interaction of FDI determinants of for all 63 provinces in Vietnam during the recovery period after the global financial meltdown from 2011 to 2014. The Spatial Durbin Model (SDM) confirms the effects of traditional determinants of FDI including market size, the presence of seaports, labor quality, labor cost and local government’s degree of openness. The model’s indirect effects also reveal spillover impacts of determinants of neighboring provinces, which sheds light on the mechanism that drives FDI among jurisdictions and regions. The findings support policymakers to think of economic development as a regional and inter-regional issue instead of provincial one.

Download slides. (Updated on 25/05/2017)