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Econometric Essay

1875 words - 8 pages

Table of Contents

Chapter 1: INTRODUCTION 2

Chapter 2: THEORETICAL BASIS 3

Chapter 3: DATA COLLECTION 5

Chapter 4: EMPIRICAL MODEL AND HYPOTHESIS TESTS 7

Chapter 5: CONCLUSION 14

Chapter 1: INTRODUCTION

Since the introduction of doi moi (renovation) economic reforms in 1986, Vietnam’s economy has been among the fastest growing economies in the region. Its economic structure reflected an increasing share of industry and services while the share of agriculture declined. Vietnam has been successful in poverty reduction ...view middle of the document...

Nguyen Manh Toan’s report from Da Nang Economics University, location advantages of different countries are the key factors to determining who will become host countries for the activities of transnational corporations.
The specific advantages of each country in general and each locality of it in particular can be divided into three categories:
• The infrastructure benefits consist of export processing zones ( EPZs ) as well as industrial zones.
• Political advantages: common and specific government policies that affect FDI flows.
• Resources advantages includes geography, number of labors
After considering the factors as above, we come to decision on researching these ones:
1. Industrial zone (the number of industrial and export processing zones): this belongs to technical infrastructure and seems to be one of the most important factors to attract FDI to any area in Viet Nam. Therefore, the expectation of Industrial zone is positive (+)
2. School (the number of all types of schools in one area): This kind of social infrastructure is one criterion that encourages foreign companies investing in a locality. More schools will reflect higher level of labor force. The expectation School is positive (+)
3. Policy (measured based on level): open and flexible policies of the local authority will motivate foreign firms to establish their new business or invest money in this locality. There are 3 increasing levels of good policy :
• 0: normal
• 1: good
• 2: very good
The coefficient is expected to have positive (+) sign.
4. Density (people/km2): Foreign companies when decide to invest in one area also want to exploit a great number of young labor forces with low salary. Therefore, the expectation density is positive (+).
5. Finally, Region: Different kinds of topography may create advantages or disadvantages for economy development in each locality and this affect the amount of FDI as well. This Dummy variable includes:
• 0: mountain area and midland
• 1: coast
• 2: Delta
Its expectation sign is positive (+)

Therefore, the model proposed is:

FDI = [pic]INDUSTRIAL ZONE +[pic]SCHOOL + [pic]POLICY
+[pic]DENSITY +[pic]REGION

Chapter 3: DATA COLLECTION

3.1 Source of survey:

The data is collected from some websites of...

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