(Luận văn) determinants of provincial fdi in vietnam , a cross section data analysis

INSTITUTE OF SOIAL STUDIES UNIVERSITY OF ECONOMICS t to THE HAGUE HO CHI MINH CITY ng THE NETHERLANDS VIETNAM hi ep VIETNAM-NETHERLANDS w n PROGRAMME FOR M.AIN DEVELOPMENT ECONOMICS lo ad ju y th yi pl DETERMINANTS OF PROVINCIAL FDI IN VIETNAM: al n ua A CROSS SECTION DATA ANALYSIS n va A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS ll oi m fu _ at nh By z z NGUYEN DAI HIEP vb om l.c gm Dr NGUYEN VAN PHUC k Academic Supervisor: jm ht ,_, 1•- an Lu n va HO CHI MINH CITY, JANUARY 2011 re ' ' t to ng DECLARATION hi ep w n I declare that 'Determinants of provincial FDI in Vietnam: A cross section data lo ad analysis' is my own work, that it has not been submitted for any degree or y th examination at any other University, and that all sources used or quoted are indicated ju and knowledge by complete references yi pl n ua NGUYEN DAI HIEP al January 3, 2011 n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va re ACKNOWLEDGMENTS t to ng hi ep This thesis would never have been written if had not for the encouragement, support, and assistance which I received from large number of people w n lo ad Specially, I would like to thank my supervisor, Dr Nguyen Van Phuc, for his y th encouragement, kindness, patience and valuable advices, which helped shape and ju improve this thesis I would also like to thank a few anonymous referees and added yi pl explanatory variables who helped me finalize this work ua al n I would also like to sincerely thank Prof Dr Peter Calkins for his honest and valuable va n advices from I begin to choose the topic and TRD completion He is truly a noble fu ll teacher, who soonest feedback and detail instruction during TRD establishing oi m nh I would also like to thank science committee; all the members of the Vietnamese- at z Dutch Project for MA programme in Development Economics, University of z and also to my friends in the class 15.Thank you a great time! Last, I want to thank my family members, friends k jm ht vb Economics-HCMC, VietNam for their support and goodwill, and to all the lecturers, om l.c gm Any errors and omissions in this thesis are my sole responsibility n a Lu n va re - - TABLE OF CONTENTS t to ng Declaration hi ep Acknowledgements - Table of contents w n Table list lo ad Abstract ju y th Chapter 1: Introduction 1.1 Problem Statement yi pl 1.2 Research Objectives al ua 1.3 Research questions n 1.4 Organization of the study va n Chapter 2: Theoretical Consideration and Literature Review ll fu ll 2.1 The regional development and competitive regionalism theory 11 m oi 2.2 FDI theories and its applicability 11 nh 2.2.1 Capital Theory _ 11 at z 2.2.2 The International Trade Arguments _ .12 z ht vb 2.2.3 Market Failures and Industrial Organization 13 2.2.4 The Eclectic Paradigm and International Investment Path 13 k jm 2.2.5 Agglomeration Effect 14 gm 2.3 Empirical studies on the determinants ofFDI 17 om l.c 2.4 Geographical literature on Vietnam, China and ASEAN countries l9 Chapter 3: Research Model, Data Collection and Variable Description 24 a Lu 3.1 Model Specification 24 n n 3.3 Variables description 26 va 3.2 Data Collection 25 r Chapter 4: Empirical Estimation and Result 34 4.1 Correlation among explanatory variables 34 t to 4.2 Empirical estimation and result .35 ng Chapter 5: Conclusion and Recommendation .42 hi 5.1 Conclusion and recommendation 42 ep 5.2 Limitation 43 w References 45 n lo Appendices 49 ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va r TABLE LIST • t to ng Table 2.1: Theory summary 15 hi ep Table 2.2: Empirical Study Reading 22 Table 3.1: The implementation value of provincial FDI 26 w n Table 3.2: FDI capital of top ten provinces 26 lo ad Table 3.3: PCI result in 2009 27 ju y th Table 4.1: Matrix of Correlation among explanatory variables 34 Table 4.2: Regression Results 36 yi pl Table 4.3: Top five rank of attracting FDI in Viet Nam 38 al n ua Table 4.4: The rank of infrastructure in 2009 39 n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va t re t to ABSTRACT ng hi FDI is of essential importance for achieving economic growth for developing ep countries, especially for Vietnam, a country which has just opened more than twenty w years There were too many researches about attracting FDI for developing countries n lo However, there are still less researches related to regional competition of FDI ad Therefore, this paper examines the relationship between provincial FDI in VietNam y th and explanatory variables base on variable set of PCI project in VietNam and other ju yi traditional variables The purpose of thesis is finding why some provinces and cities pl such as Binh Duong, Dong Nai, Ba Ria Vung Tau, HCMC have had good FDI al ua capital and others have not so From that the thesis suggests policy recommendation n for provinces and cities enhancing regional system for developing economics va n I had a literature review on regional development, attracting regional FDI and across fu ll country, the estimated model was built with collected data and econometric analysis m result, I had demonstrated that our hypotheses are right or wrong And then we oi at nh answered the research questions and objectives of this study Using data collected by the General Statistical Office of VietNam (GSO) and Provincial Competition Index z z (PCI) project, estimation result shows that gross industrial output, legal institution and vb ht infrastructures statistically significant to provincial FDI at the level 1% and 5%; k jm business support service had significance to provincial FDI at the level nearly 10% gm om l.c Key words: PCI, FDI impact, Provinces in VietNam, cross section data analysis n a Lu n va re t to ng hi ep 1.1 Problem Statement w n The Provincial Competitiveness Index (PCI) is an effort to explain why some parts of lo the country perform better than others in terms of private sector dynamism, job ad y th creation and economic growth and attracting investment (FDI and local) Using new ju survey data from businesses that describe their perceptions of their local business yi environments as well as credible and comparable data from official and other sources pl ua al regarding local conditions, the PCI rates provinces on a 100-point scale In 2005, the overall index is comprised of nine sub-indices that explain much of the variation in n n va performance across provinces in Vietnam In 2006, new sub-indices were developed to capture other aspects of Provincial Government efforts to enhance the business ll fu environment m oi However, we have not found any empirical studies to show that which are independent nh variables of PCI and other traditional variables effect to provincial FDI and how to at z impact to provincial FDI in VietNam z vb I also did not find any analysis related to the independent variables of PCI whether jm ht they have internal relation 1.2 Research Objectives k l.c gm The overall goal of this research is to investigate significant impacts of some independent variables of PCI and other traditional variables which affect provincial om FDI inflows (Regional FDI) to help policy makers to focus on key points and the good an Lu points to improve their investment environment (by Provinces) and with higher level (by Government) n va t re There exist some previous studies related to attracting FDI to developing countries; t to most of these have found what factors ofthe country attracting FDI (across countries) ng hi However, the objectives of the thesis are to identify: ep (i) Independent variables of PCI and other traditional variables are significant impacts to FDI of Provinces in Vietnam; and w n (ii) lo PCI determinants out of the ten original factors should be included in a new, ad (iii) Factors of PCI are highly correlated and we should revise PCI set (iv) ju y th more significant subset base of PCI determinants Interaction effects between PCI improvement and FDI growth yi pl 1.3 Research questions ua al The thesis focus on studying the determinants of provincial FDI in Viet Nam base on n the independence variable set of the Provincial Competitiveness Index (PCI) and other va some traditional variables could be attracting FDI of provinces in VietNam n ll fu We found economic theory, and empirical studies related to FDI (chapter 2), the oi m description of each independence variable which PCI project in Viet Nam use to nh survey (chapter 3) We build research model (specification) and collect the data from at PCI project (www.pcivietnam.org) and statistical yearbook of Vietnam from General z z Statistics Office (www.gso.gov.vn) to answer some research questions as following: vb (l)Which independent variables of PCI and other traditional variables are significant ht jm impacts to FDI of Provinces in Vietnam? k (2)Factors ofPCI are highly correlated and we should revise PCI set? gm (3)Which PCI determinant out of the ten original factors should be included in a new, om (4)Are interaction effects between PCI improvement and FDI growth? l.c more significant subset base of PCI determinants? an Lu 1.4 Organization of the study This thesis has five chapters, while the chapter one has presented as above explain the n va purpose chose the theme The rest of this thesis is organized as follows: re t to Chapter two briefly provides the regional development and FDI theory, and then we ng also have summarized the empirical researches related to attracting FDI, specially hi related to attracting FDI across to provinces of the country ep Chapter three is presented how to build the research model base on chapter two, the w way to choose the data It is important to explain dependent and independent variables n lo which PCI project have used to survey yearly, also including some traditional ad variables y th Chapter four is the econometric analysis and finding The last chapter will be ju yi conclusion and recommendation of the research pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va re 10 APPENDICES t to ng Table 1: Sources of Table hi No Calculating Name ofVariables Notation Sources ep Depend Variable w FDI n Provincial Foreign Direct Investment- Average from pFDI (mill USD) 2006-2009 lo Independent Variables ad ju y th Access to Land of each province, Average from PCI survey yearly, point= I to 10 2006-2009 project- yi AL VietNam pl Business Support Service of each ua al province, survey yearly, point= to 10 n Entry Costs of each province, survey fu ll yearly, point=1 to 10 2006-2009 project- Average from PCI 2006-2009 project- m VietNam oi EC Informal Charge of each province, survey yearly, point= I to 10 at nh PCI VietNam va Average from n BSS Average from PCI 2006-2009 project- z VietNam z IC vb Infrastructure of each province, survey gm Gross output of industry at constant Average from 1994 prices by province ( Bil VND) 2006-2009 Legal Institution of each province, Average from PCI survey yearly, point=1 to 10 2006-2009 project- om an Lu LI VietNam Labour Training of each province, Average from PCI n va LT GSO l.c VietNam k IP PCI project- jm INF Value at 2008 ht yearly, point to 100 GSO t re 49 project- 2006-2009 survey yearly, point= to 10 t to VietNam ng hi 10 ep PPL Proactivity of Provincial Leadership of Average from PCI each province, survey yearly, point=1 to 2006-2009 projectVietNam 10 Average from PCI Information of each province, survey 2006-2009 project- n Transparency and Access to lo w II ad ju yi Time Costs of Regulatory Compliance Average from PCI of each province, survey yearly, point=1 2006-2009 project- pl TCRC VietNam yearly, point=l to 10 y th 12 TAl to 10 VietNam al Retail sales of goods and services at Average from n MS ua 13 current prices by province GSO 2006-2009 n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va e t re 50 Table 2: Expected effect of independent variables t to Expected sign ng Name ofVariables Notation AL Access to Land of each province + BSS Business Support Service of each province, + EC Entry Costs of each province - IC Infonnal Charge of each province - Infrastructure of each province + IP Gross output of industry + LI Legal Institution of each province + Labour Training of each province + hi No ep w n lo ju INF y th ad PPL + Proactivity of Provincial Leadership of each ua al pl LT yi province fu oi + nh Market Size at MS m province 12 - Time Costs of Regulatory Compliance of each ll TCRC n province II + Transparency and Access to Infonnation of each va TAl n 10 z z k jm ht vb om l.c gm n a Lu n va te re 51 Table R3.1 OLS result: General Estimation t to Dependent Variable: FDI ng hi Method: Least Squares ep Date: 11/28110 Time: 07:52 Sample: 63 w n Included observations: 63 y th ju yi AL pl t-Statistic Pro b -549.2492 473.3872 -1.160254 0.2515 -58.81156 40.52070 -1.451395 0.1529 -56.72349 42.86048 -1.323445 0.1917 27.09780 45.87978 0.590626 0.5574 23.66403 60.37637 0.391942 0.6968 6.806537 3.462824 1.965603 0.0549 0.001623 6.990285 0.0000 42.98600 2.297402 0.0258 31.26290 -1.057817 0.2952 27.04513 -0.251387 0.8025 n va INF n IC ua EC al BSS Std Error z ad c Coefficient fu lo Variable 0.011343 LI 98.75612 LT -33.07042 PPL -6.798794 TAl 22.33385 38.06656 0.586705 0.5600 TCRC 21.30427 35.70395 0.596692 0.5534 KEA -14.45187 77.72050 -0.185947 0.8532 R-squared 0.756475 Mean dependent var Adjusted R-squared 0.698029 S.D dependent var S.E ofregression 152.6369 Akaike info criterion Sum squared resid 1164902 Schwarz criterion k jm ht 109.6462 277.7646 l.c gm 13.07559 om 13.51782 Hannan-Quinn criter 13.24952 Durbin-Watson stat 1.524842 n a Lu n va 0.000000 vb Prob(F -statistic) z 12.94314 at F-statistic nh -398.8810 oi m Log likelihood ll IP • te re 52 Table R3.2 Regression No.02 t to Dependent Variable: FDI ng hi Method: Least Squares ep Date: 11/28/10 Time: 07:55 Sample: 63 w n Included observations: 63 lo Std Error t-Statistic Pro b -480.5299 410.8795 -1.169515 0.2475 -60.00294 38.17154 -1.571929 0.1220 -56.41570 41.12630 -1.371767 0.1760 27.22179 44.93207 0.605843 0.5473 14.95326 53.10300 0.281590 0.7794 2.760459 2.383522 0.0208 0.001394 7.978977 0.0000 37.40989 2.515519 0.0150 30.16600 -1.084470 0.2832 z ju y th Coefficient fu ad Variable yi c n n va IC ua EC al BSS pl AL 6.579613 IP 0.011124 LI 94.10527 LT -32.71414 TAl 19.48059 35.97586 0.541491 0.5905 TCRC 21.93116 34.88220 0.628721 0.5323 R-squared 0.755947 Mean dependent var Adjusted R-squared 0.709013 S.D dependent var S.E ofregression 149.8351 Akaike info criterion Sum squared resid 1167428 Schwarz criterion ll INF oi m at nh z 13.16144 1.508808 n a Lu n va 0.000000 13.38846 om Prob(F -statistic) Durbin-Watson stat 13.01426 l.c 16.10682 277.7646 F-statistic Hannan-Quinn criter gm -398.9493 k jm ht vb Log likelihood 109.6462 t re • ~ 53 t to ng Table R3.3 Regression No.03 hi Dependent Variable: FDI ep Method: Least Squares Date: 11/28/10 Time: 07:57 w n Sample: I 63 lo ad Included observations: 63 ju Std Error t-Statistic Pro b -447.5560 368.1538 -1.215677 0.2294 -47.88471 31.23973 -1.532815 0.1312 -42.86376 33.25264 -1.289033 0.2029 28.52452 43.85878 0.650372 0.5182 2.689276 2.349394 0.0225 0.001360 8.091305 0.0000 35.26903 2.680447 0.0097 28.98503 -0.981555 0.3307 0.729474 0.4689 yi Coefficient fu y th Variable pl c n n va EC ua BSS al AL 6.318169 IP 0.011003 LI 94.53679 LT -28.45041 TCRC 24.79147 33.98543 R-squared 0.754023 Mean dependent var Adjusted R-squared 0.717582 S.D dependent var 277.7646 S.E ofregression 147.6124 Akaike info criterion 12.95862 Sum squared resid 1176629 Schwarz criterion ll INF oi m at nh z z 13.07904 om 1.493211 n a Lu 0.000000 13.26478 l.c Prob(F-statistic) Durbin-Watson stat 20.69163 Hannan-Quinn criter gm F-statistic k jm -399.1965 ht vb Log likelihood 109.6462 n va t re 54 Table R3.4 Regression No.04 t to Dependent Variable: FDI ng Method: Least Squares hi ep Date: 11/28/10 Time: 07:58 Sample: 63 w n Included observations: 63 lo Std Error t-Statistic Pro b -211.4629 203.2044 -1.040641 0.3025 -44.83035 30.53984 -1.467930 0.1477 -37.33395 32.30533 -1.155659 0.2527 6.596859 2.579005 2.557909 0.0133 0.010739 0.001296 8.283895 0.0000 34.01125 2.973022 0.0043 27.10756 -0.735436 0.4651 ju y th Coefficient n ad Variable n va IP ua INF al BSS pl AL yi c 101.1162 LT -19.93587 ll fu LI oi m nh R-squared 0.750307 Mean dependent var Adjusted R-squared 0.723554 S.D dependent var S.E of regression 146.0434 Akaike info criterion Sum squared resid 1194406 Schwarz criterion 13.14825 Hannan-Quinn criter 13.00378 109.6462 at 277.7646 z 1.467836 om l.c gm 0.000000 k Prob(F -statistic) Durbin-Watson stat jm 28.04590 ht F-statistic vb -399.6689 z Log likelihood 12.91012 n a Lu n va t re 55 t to Table R3.5 Regression No.05 ng Dependent Variable: FDI hi Method: Least Squares ep Date: 11/28/10 Time: 08:00 w Sample: I 63 n lo Included observations: 63 ad Std Error t-Statistic Pro b -218.1488 202.1817 -1.078974 0.2851 -44.00827 30.39622 -1.447821 0.1531 -48.13647 28.65678 -1.679759 0.0985 6.159920 2.499510 2.464451 0.0168 0.001284 8.440153 0.0000 32.99978 2.893056 0.0054 ju Coefficient fu y th Variable yi n n va INF ua BSS al AL pl c 0.010838 LI 95.47022 ll IP oi m 0.747895 Mean dependent var Adjusted R-squared 0.725781 S.D dependent var 277.7646 S.E ofregression 145.4540 vb at nh R-squared Akaike info criterion 12.88799 Sum squared resid 1205942 Schwarz criterion 109.6462 z 12.96827 1.467968 om l.c 0.000000 Durbin-Watson stat gm Prob(F -statistic) Hannan-Quinn criter k 33.81932 jm F-statistic ht -399.9717 z Log likelihood 13.09210 an Lu n va re • 56 t to Table R3.6 Regression No.06 ng hi Dependent Variable: FDI ep Method: Least Squares Date: 11128/10 Time: 08:03 w n Sample: I 63 lo ad Included observations: 63 y th Variable Std Error t-Statistic Pro b -425.0812 144.3463 -2.944870 0.0046 -47.33038 28.92085 -1.636549 0.1071 5.968698 2.519495 2.369006 0.0212 0.001255 9.009201 0.0000 31.52059 2.538681 0.0138 ju Coefficient yi va 0.011305 n 80.02072 ll fu LI n IP ua INF al BSS pl c 0.738624 Adjusted R-squared 0.720598 S.D dependent var 277.7646 S.E ofregression 146.8221 at m R-squared Akaike info criterion 12.89236 Sum squared resid 1250291 Schwarz criterion Mean dependent var oi 109.6462 nh z Prob(F -statistic) 0.000000 12.95926 Durbin-Watson stat 1.480202 k jm 40.97567 Hannan-Quinn criter ht F-statistic vb -401.1093 z Log likelihood 13.06245 om l.c gm n a Lu n va t re • 57 t to Table 4: The White Heteroskedasticity Test (No cross terms) ng White Heteroskedasticity Test: hi ep F-statistic 1.655384 Probability 0.080879 Obs*R-squared 31.12148 Probability 0.119838 w Test Equation: n lo Dependent Variable: RESID/\2 ad Method: Least Squares Sample: I 63 ju y th Date: 11128110 Time: 23:25 yi Included observations: 63 pl Std Error t-Statistic Pro b 1181520 3221604 0.366749 0.7158 224840.1 310916.5 0.723153 0.4739 AL/\2 -18251.90 25041.06 -0.728879 0.4704 BSS 173714.7 171610.6 1.012261 0.3177 BSS/\2 -24185.85 18183.94 -1.330066 0.1912 EC -239308.0 -0.339513 0.7360 EC/\2 15750.55 0.355128 0.7244 IC 236931.9 439033.8 0.539667 0.5925 IC/\2 -16971.77 33208.46 -0.511068 0.6122 INF -15587.33 14130.50 -1.103099 0.2767 INP'2 162.7767 141.7105 1.148656 0.2577 IP 5.496573 2.822001 1.947757 IP/\2 -l.84E-05 2.27E-05 gm 0.0587 -0.811153 0.4222 LI -258417.7 227961.7 -1.133601 0.2639 Ll/\2 32203.45 24910.96 1.292742 LT 73823.70 103656.9 0.712193 0.4806 LT/\2 -7511.556 10190.74 -0.737097 0.4655 PPL 70854.75 91090.23 0.777852 0.4413 n va AL n c ua Coefficient fu al Variable ll oi m nh 704856.2 at 44351.78 z z k jm ht vb om l.c 0.2037 an Lu n va t re • 58 • -8628.330 8108.898 -1.064057 0.2938 TAl -133598.0 126110.8 -1.059370 0.2959 TAI"'2 15280.56 11649.50 1.311693 0.1973 TCRC -496289.2 238223.7 -2.083291 0.0438 TCRC"'2 48021.71 21844.30 2.198363 0.0339 KEA -19626.68 51982.02 -0.377567 0.7078 t to PPL"'2 ng hi ep w n lo Mean dependent var 18490.50 0.195577 S.D dependent var 94593.17 84840.28 Akaike info criterion 25.81726 Sum squared resid 2.81E+11 Schwarz criterion 26.63369 -789.2437 F-statistic 1.655384 Prob(F -statistic) 0.080879 ad 0.493992 y th R-squared Adjusted R-squared S.E of regression ju yi 1.501341 ua al Durbin-Watson stat pl Log likelihood n P-value = I I 9> 5% , No HET in this model n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va t re • 59 - t to Table 5: The Wald Test ng hi Wald Test: ep Equation: Untitled w n Probability df Value Test Statistic lo ad F-statistic y th Chi-square (8, 50) 0.2555 10.55980 0.2279 Value Std Err ju 1.319975 yi pl al Null Hypothesis Summary: n ua n va Normalized Restriction(= 0) oi at nh C(4) m C(3) ll fu C(1) C(8) 473.3872 -56.72349 42.86048 27.09780 45.87978 98.75612 42.98600 -33.07042 31.26290 z -549.2492 z C(9) vb -6.798794 27.04513 C(ll) 22.33385 38.06656 C(l2) 21.30427 35.70395 k jm ht C(IO) l.c gm Restrictions are linear in coefficients om an Lu P-value F = 0.2279 > 5% ~ Fail to reject Ho ~ Sellecting the simple model n va t re • 60 • Table 6: Correlogram Q-Statistics t to Date: II/29110 Time: 00:19 ng Sample: I 63 hi Included observations: 63 ep Autocorrelation w n lo ad yi I pl n n va ll fu PAC -0.085 Q-Stat -0.085 Prob 0.488 0.4809 0.018 O.OIO 0.50I5 0.778 -0.004 -0.002 0.5028 0.9I8 0.110 0.110 1.3456 0.854 0.091 0.112 1.9306 0.859 -0.027 -0.012 1.9811 0.92I -0.046 -0.054 2.1372 0.952 -0.088 -0.115 2.7181 0.951 -0.008 -0.051 2.7230 0.974 10 0.013 0.006 2.7353 0.987 11 0.053 0.080 2.9587 0.991 12 -0.027 0.025 3.0153 0.995 13 -0.164 -0.150 5.2269 0.970 14 0.056 0.016 5.4903 0.978 oi -0.023 -0.044 5.5359 0.987 m 15 -0.036 -0.065 5.6495 0.991 17 -0.043 -0.011 5.8136 0.994 I8 -0.246 -0.235 Il.3I9 0.880 z 16 at nh I9 -0.010 -0.060 11.329 0.912 20 -0.042 vb z 11.500 0.932 21 0.004 -0.012 11.501 0.952 -0.044 -0.097 -0.037 -0.028 24 0.084 0.096 0.918 13.523 13.661 0.936 I4.408 0.937 l.c gm -0.142 23 k 22 jm ht 25 O.D78 0.071 15.067 26 -0.033 -0.068 15.190 27 0.001 0.004 15.190 0.967 28 0.076 0.041 15.863 0.968 0.954 an Lu n va AR does not exist in this model 0.940 om ·I· I .I .I **1 .I .I .I I *I I -I· I I*· I 1* I I I I I -I* I ju • y th -I· *1 .•1 I ·I· I -I· I -I*· I -I* I I I ·I· I *1 I I I ·I· I I* I -I· I *1 I -I· I ·I· I I I I I **I I -I· I I I -I· I *1 I I I -I* I I I *1· I ·I· I ·I· I ua I I I I I I I I I I I I I I I I I I I al *1 -I· I -I* -I*· I .I .*I -I· -I· I AC Partial Correlation t re • ~ 61 d • ju y th • • yi pl ua al Table 7: Matrix of Correlation among Explanatory variables INF IP LI LT PPL TAl TCRC MS 0.587344 -0.023645 -0.279786 0.339452 0.018306 0.456193 0.232489 0.156726 -0.252539 m ll 0.755183 0.610939 0.302026 0.728165 0.509042 0.752013 0.543298 0.527710 0.155114 0.109491 -0.126805 0.338421 0.336528 0.289464 0.297717 0.082589 -0.161585 -0.113011 0.477916 0.280546 0.629927 0.370366 0.343537 -0.133767 0.543151 0.274197 0.651423 0.350388 0.532088 0.566604 0.442128 ht 0.012219 0.383837 0.196515 0.315223 0.272102 0.885623 0.012219 1.000000 0.392201 0.643586 0.316825 0.343543 -0.045219 1.000000 0.515889 0.652770 0.570061 0.324225 0.515889 1.000000 0.628578 0.436839 0.188026 0.652770 0.628578 1.000000 0.502590 0.281665 Lu n IC 0.436839 0.502590 1.000000 0.108097 0.281665 0.108097 1.000000 EC BSS AL 1.000000 -0.060361 0.127156 BSS -0.060361 1.000000 0.214889 EC 0.127156 0.214889 1.000000 IC 0.587344 0.185477 0.155114 1.000000 0.156503 INF -0.023645 0.755183 0.109491 0.156503 1.000000 lP -0.279786 0.610939 -0.126805 -0.113011 0.543151 LI 0.339452 0.302026 0.338421 0.477916 0.274197 LT 0.018306 0.728165 0.336528 0.280546 0.651423 0.383837 PPL 0.456193 0.509042 0.289464 0.629927 0.350388 0.196515 0.643586 TAl 0.232489 0.752013 0.297717 0.370366 0.532088 0.315223 0.316825 TCRC 0.156726 0.543298 0.082589 0.343537 0.566604 0.272102 0.343543 0.570061 MS -0.252539 0.527710 -0.161585 -0.133767 0.442128 0.885623 -0.045219 0.324225 n va AL fu 0.185477 oi at nh z z vb 1.000000 k jm gm 0.392201 om l.c an va 0.188026 n y te re ac th si eg cd jg 62 hg - - - ~ - Table 8: log estimation between PCI and pFDI t to Dependent Variable: Log(FDI) ng Method: Least Squares hi Date: I 1/18/10 Time: 23:18 ep Sample (adjusted): 62 w Included observations: 62 after adjustments n lo ad Variable Std Error t-Statistic Prob -35.88196 8.563074 -4.190313 0.0001 9.593381 2.136220 4.490821 0.0000 pl Log(PCI) yi c ju y th Coefficient ua al 0.251567 n R-squared va 0.239093 S.E of regression 2.076874 Sum squared resid 258.8044 n Adjusted R-squared Mean dependent var 2.555023 S.D dependent var 2.380918 fu Akaike info criterion 4.331331 ll F-statistic 20.16747 Prob(F -statistic) 0.000033 at nh 0.451771 oi Durbin-Watson stat -132.2713 m Log likelihood 4.399949 Schwarz criterion z z k jm ht vb om l.c gm an Lu n va e t re 63