(Luận văn) fdi and income inequality, evidence from panel data of vietnams provinces

t to UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES ng hi HO CHI MINH CITY THE HAGUE ep VIETNAM THE NETHERLANDS w n lo VIETNAM - NETHERLANDS ad ju y th PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS yi pl ua al n FDI and Income Inequality: n va ll fu Evidence from panel data of Vietnam’s provinces oi m at nh z BY z jm ht vb LAM VAN ROI k MASTER OF ARTS IN DEVELOPMENT ECONOMICS om l.c gm n a Lu n va y te re th HO CHI MINH CITY, December 2014 t to UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES ng hi HO CHI MINH CITY THE HAGUE ep VIETNAM THE NETHERLANDS w n lo VIETNAM - NETHERLANDS ad ju y th PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS yi pl al n ua FDI and Income Inequality: va n Evidence from panel data of Vietnam’s provinces ll fu oi m at nh z z ht vb A thesis submitted in partial fulfilment of the requirements for the degree of k jm MASTER OF ARTS IN DEVELOPMENT ECONOMICS om n a Lu Academic Supervisor: l.c LAM VAN ROI gm By n va PHAM KHANH NAM y te re th HO CHI MINH CITY, December 2014 t to ABSTRACT ng hi DOES FDI AFFECT ON INCOME INEQUALITY? ep This paper attempts to estimate GINI indices for all provinces of Vietnam and w n contributes to explore the relationship between FDI and income inequality The thesis lo ad uses a balance panel data for 56 provinces in years which includes GDP, FDI and y th income distribution The thesis found that there is no evidence impact of FDI to ju income inequality 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 y te re th t to Contents ng hi Chapter 1: INTRODUCTION ep Problem statements Research objectives w n Research Scope and data lo ad Organization of the thesis y th Chapter 2: LITERATURE REVIEWS ju Theoretical backgrounds yi Empirical studies 10 pl Chapter 3: RESEARCH METHOLOGY 14 al ua Data 14 n 1.1 Gini Coefficient 14 va n 1.2 Share of FDI in GDP 15 ll fu 1.3 Data summary 15 oi m Conceptual Framework: 18 nh Model specification 18 at Chapter 4: RESULTS OF ANALYSIS ON FDI AND INCOME INEQUALITY 23 z Foreign Direct Investment in Vietnam – An overview 23 z vb Income inequality in Vietnam 27 jm ht Descriptive statistics 29 Regression results 32 k gm Chapter 5: CONCLUSIONS AND POLICY RECOMENDATION 37 Conclusions 37 l.c om Policy Recommendations 38 Limitation of the thesis and suggestion of further research 41 a Lu REFERENCES 42 n A – DATA ON FDI AND GINI 46 Table 4: 10 sectors attracting FDI head of VN in 9M-2014 48 Table 5: Some facts about income distribution and inequality in Vietnam 49 th Table 3: Top 10 provinces in FDI attraction in 11 month of 2014 48 y Table 2: Vietnam’s 10 leading FDI investors in 11 months of 2014 47 te re Table 1: Information detail for provinces 46 n va APPENDIX 46 t to B - DESRRIPTION OF THE DATASET 49 ng Table 0: List of provinces and variables detail 49 hi Table 6: Summary statistic of variables 60 ep Table 7.1: Results of Pool OLS 61 w Table 7.2: Result run Random Effect Model 61 n Table 7.3: Result of Fixed Effect Model 62 lo ad Table 8: Result of Hausman Test 62 y th Table 9: Summary of two new regression for Fixed and Random Effect 63 ju C- Figure of endogeneity test and solution: 64 yi Figure 1: IV estimator 2SLS 64 pl al Figure 2: First-stage regression and instruments are weak test 65 n ua Figure 3: Endogeneity Test 65 n va Figure 4: Regression for FDI stock in GDP by lagged of FDI stock in GDP 65 ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th t to Chapter 1: INTRODUCTION ng hi This chapter of the thesis will introduce the problem statement and research object ep under the perspective of the social sciences It stated why this thesis was formed for w the purpose of explaining the relationship between FDI and income inequality This n lo chapter also presents the essential content and will be explained in detail in the next ad chapter In addition , the structure of the thesis is also stated in this chapter y th ju Problem statements yi pl ua al In recent years, Vietnam has made significant achievements in improving the economy and society The growth of economy is about 7% per year, GDP per capita n n va has increased and poverty ratio has reduced year by year (Mahajan et al., 2014) This ll fu achievement is a positive signal for the transitional economy, and Vietnam also oi m changes many policies to follow up with the globalization trend In 2009, Vietnam was a member of Lower-middle income countries and became a success story nh at Vietnam’s economic growth made poverty situation decreasing and improving z z income inequality Sustainable economic growth is an advantage to attract more FDI jm ht vb from developed countries k Opening economy in Vietnam, after Doi Moi Policy, is also like other developing gm countries in improving environmental investment in order to attract more FDI from om l.c the world According to ASEAN Business Outlook Survey in 2012/2013, there were over 50% of foreign investors wanted to expand their businesses in Vietnam, because a Lu Vietnam has the political stability and a safety destination That is the reason why FDI n has been increasing year by year th y unevenly distributed among provinces of Vietnam, so the impact of FDI to each te re growth rate, alleviate poverty and technology transition However, FDI is often n va The impact of FDI to Vietnam’s economy is very important because FDI entices the t to province is different from province to province The understanding FDI is important ng to make policy hi ep The empirical study about FDI in provinces of Vietnam focused on researching w impact of FDI to economic growth, employment generation and technology spillover n lo effect Furthermore, the analysis of FDI in inequality has few studies and the most of ad studies treats impact of FDI between countries in economic growth y th ju In addition, the role of FDI investment in the country as well as the provinces of the yi pl country that generated a strong effect in attracting an abundant labor force of that al ua country where FDI decides to make an investment Therefore, the creation of jobs for n the workforce in place that FDI will create the income distribution in the entire va n region The income distribution is uneven, and it depends greatly on the level of fu ll technology, skilled labor, skills of the workforce in the environment So therefore , m oi the required skill level of the labor multinational companies appear and create a at nh greater pressure on the demand of high quality labor but high-quality labor supply in z the country has certain restrictions This leads to large disparities in the distribution of z k jm ht create a rise in inequality of workers’ income vb wages between skilled and unskilled manual workers who not have the skills, and gm The inequalities and FDI in many countries have been much a controversial debate in academic literature Gottschalk and Smeeding (1997) and Acemoglu (2003a) found l.c om evidence about FDI which tends to increase the inequalities between skilled and a Lu unskilled workers Hence, the purpose of this paper attempts to analyze the impact of FDI to income inequality in provinces of Vietnam in order to understand deeply what n provinces in Vietnam to capture inequality overview th larger gap In addition, the paper also estimates details of Gini Coefficient for y investigate whether FDI helps provinces to improve income inequality or to make it a te re in this paper is understood as income inequality In other words, this thesis attempts to n va the impact of FDI is and suggest some recommendations in making policy Inequality t to Research objectives ng hi a To estimate GINI Index for provinces in Vietnam ep b To examine FDI impact on income inequality in provinces Vietnam w n lo Research Scope and data ad ju y th This thesis concentrates on all provinces in Vietnam because there were few studies which researched about FDI and in equality before In addition, the main aim of this yi pl thesis attempts to explore the impact of FDI to the inequality The paper calculates al n ua GINI index for each province in order to introduce views of income distribution n va The estimation model in this paper is implemented by using panel data with over 50 ll fu provinces in Vietnam The data was collected and estimated from VHLSS, GSO’s oi m Statistical Yearbook various years (2002, 2004, 2006, 2008 and 2010) at nh Organization of the thesis z z The thesis includes five chapters: ht vb jm Chapter one introduces about the problem statement which is the guideline of this k research Following the introduction, chapter two will collect information from some l.c gm controversies about FDI and Income inequality om According to theoretical literatures, FDI departs from multinational companies a Lu invested into countries with new technology and management skills, and helped labor n forces in this country to improve their skills and productivity performances FDI is a y contributes to the economic growth of a country, creates more jobs for the labor te re help emerging countries to develop and escape from the poorness FDI also n va tool for those multinational companies to expand their powers to the world, but it does th forces which should have been jobless without FDI t to In chapter three, the thesis attempts to introduce the methodology to analyze the panel ng data In this section, we use econometric model to find relationships between FDI and hi ep Income inequalities by using panel data provinces of Vietnam w The very next chapter which is chapter four will show the estimation’s result derived n lo from the model introduced in the previous chapter This result pointed out the ad correlation as well as the effect of FDI to the Income Inequality in provinces of y th Vietnam In addition, this chapter will also show the overview of FDI and Income ju yi inequality in Vietnam in recent years pl al ua The final chapter will discuss some conclusions which were brought out from chapter n four In this section, we also suggest some policy recommendations to improve FDI n va flow and income inequality ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th t to Chapter 2: LITERATURE REVIEWS ng hi This program presents some basic theories as the basic for this thesis building the ep model of elements necessary to explain the relationship between FDI and income w inequality In the first chapter , the thesis will elaborate on the basic economic theory n lo to provide an overview of the role of FDI impact on the economy where it is invested, ad then lead to the relationship between FDI and the distribution of income to the y th employee The next section of the chapter presents the empirical study of economics ju yi scholars have studied about the role of FDI and income inequality The last part of pl ua al the chapter will introduce the analytical framework based on empirical research n Theoretical backgrounds n va ll fu Income inequality is distributed unequally among individuals in a group, among oi m groups in a population or among countries It has always been of the central point of economic theories such as neoclassical theory of Adam Smith (1776) or factors nh at income distribution of Thomas Malthus and David Ricardo (1817) Modern theories z z define income inequality as distribution of income across individuals and households vb jm ht The causes of income inequality have focused on productivity of different groups k (Neoclassical economics), conflicting across labor and capital – intensive (Marxian gm economics), different gap between demand and supply of labor force (modern l.c theories), tax polices (Krugman, 2009; Saez, 2009), accessing education (Standard & om Poor’s rating agency, 2014), Finance industries (Jamie Galbraith and Stiglitz, 2012) n a Lu and globalization (Krugman and Lawrence 1993) va Globalization is characterized by an increasing and extending inequality which has th would have two side effects, but it scores a remarkable point for developing countries y and Wu (2001), Carneiro and Arbache (2003) Globalization is like other definitions te re effects of trade to income inequality within countries, like Chakrabarti (2000), Wei n been one of the leading research topics in 1990s There were a lot of researches on the hi ep gini inc 12 Lai Châu 2002 0.3196 12 Lai Châu 2004 0.3593 0.029357762 12 Lai Châu 2006 0.3556 0.027614138 0.029357762 Lai Châu 2008 0.3699 0.02208351 0.00994109 Lai Châu 2010 0.3854 0.014519795 0.003221612 2002 0.3299 Sơn La 2004 0.3379 14 Sơn La 2006 0.3573 0.001686901 14 Sơn La 2008 0.3673 0.001701216 0.001686901 14 Sơn La 2010 0.3495 0.00691856 0.000707987 15 Yên Bái 2002 0.3208 0 15 Yên Bái 2004 0.3197 0.00298922 15 Yên Bái 2006 0.3450 0.003115474 0.00298922 15 Yên Bái 2008 0.3454 0.017370465 0.000961927 15 Yên Bái 2010 0.3553 0.023037058 0.01531849 17 Hồ Bình 2002 0.3616 17 Hồ Bình 2004 0.3546 17 Hồ Bình 2006 0.3572 0.000253807 17 Hồ Bình 2008 0.3709 0.01720638 0.000253807 17 Hồ Bình 2010 0.3666 0.020339374 19 Thái Nguyên 2002 0.3493 19 Thái Nguyên 2004 0.3460 0.011726774 19 Thái Nguyên 2006 0.3630 0.029602287 0.011726774 19 Thái Nguyên 2008 0.3805 0.044270584 0.021590402 19 Thái Nguyên 2010 0.3738 0.05642969 0.026692393 20 Lạng Sơn 2002 0.3540 0.01458285 20 Lạng Sơn 2004 0.3579 0.065077443 0.01458285 20 Lạng Sơn 2006 0.3597 0.087712975 0.054248348 20 Lạng Sơn 2008 0.3596 0.078702773 0.040372626 w Sơn La ju yi 14 y th 14 ad 12 lo 12 pl n ua al n year time va ng tinh n t to Fdi tinh id stock/GDp Lag(FDI/GDP) ll fu oi m at nh z z vb k jm ht gm 0.017041414 om l.c n a Lu n va y te re th 51 ng hi ep time year gini inc 20 Lạng Sơn 2010 0.3632 0.109354619 0.026180011 22 Quảng Ninh 2002 0.2990 0 22 Quảng Ninh 2004 0.3123 0 Quảng Ninh 2006 0.3523 0.009203657 Quảng Ninh 2008 0.3635 0.032602619 0.009203657 2010 0.3516 0.068591095 0.027013325 tinh n t to Fdi tinh id w y th 22 ad 22 lo 22 Quảng Ninh stock/GDp Lag(FDI/GDP) 2002 0.2505 24 Bắc Giang 2004 0.3216 24 Bắc Giang 2006 0.3206 0.004235794 24 Bắc Giang 2008 0.3283 0.034030175 0.004235794 24 Bắc Giang 2010 0.3251 0.047061323 0.031455641 25 Phú Thọ 2002 0.3244 25 Phú Thọ 2004 0.3215 25 Phú Thọ 2006 25 Phú Thọ 2008 0.3595 25 Phú Thọ 2010 0.3599 26 Vĩnh Phúc 2002 0.3031 26 Vĩnh Phúc 2004 0.3103 0.094999082 26 Vĩnh Phúc 2006 0.3116 0.108847243 0.094999082 26 Vĩnh Phúc 2008 0.3342 0.146098638 26 Vĩnh Phúc 2010 0.3377 0.165510935 27 Bắc Ninh 2002 0.2807 0.004004255 27 Bắc Ninh 2004 0.3321 0.007055231 0.004004255 27 Bắc Ninh 2006 0.3518 0.069408237 0.004345607 27 Bắc Ninh 2008 0.3726 0.214265153 0.064789513 27 Bắc Ninh 2010 0.3637 0.302898046 0.181246513 30 Hải Dương 2002 0.3188 0 30 Hải Dương 2004 0.3061 0.032516648 30 Hải Dương 2006 0.3151 0.099668385 0.032516648 pl n ua al n yi Bắc Giang va ju 24 ll fu oi m at nh 0.3545 0.048046164 z z 0.067637754 0.048046164 vb k jm ht gm 0.046861441 om l.c 0.088091118 n a Lu n va y te re th 52 hi ep year gini inc 30 Hải Dương 2008 0.3218 0.177093401 0.075443786 30 Hải Dương 2010 0.3119 0.263286598 0.111357923 31 Hải Phòng 2002 0.3623 0.047998829 Hải Phòng 2004 0.3845 0.10971552 0.047998829 Hải Phòng 2006 0.3826 0.177867454 0.074108049 Hải Phòng 2008 0.3807 0.194946451 0.098752192 time ju ng tinh n t to Fdi tinh id w y th 31 ad 31 lo 31 stock/GDp Lag(FDI/GDP) 2010 0.3802 0.221066579 0.089603134 33 Hưng Yên 2002 0.3151 0.052866214 33 Hưng Yên 2004 0.3078 0.10014554 0.052866214 33 Hưng Yên 2006 0.3243 0.167785659 0.060268715 33 Hưng Yên va 2008 0.3251 0.160562835 0.09634073 33 Hưng Yên 2010 0.3161 0.054322297 34 Thái Bình 2002 0.2606 34 Thái Bình 2004 34 Thái Bình 2006 0.3130 34 Thái Bình 2008 0.3170 34 Thái Bình 2010 0.3193 35 Hà Nam 2002 0.3098 35 Hà Nam 2004 0.3239 35 Hà Nam 2006 0.3109 0.021647612 35 Hà Nam 2008 0.3296 0.086062606 35 Hà Nam 2010 0.3223 0.125310759 36 Nam Định 2002 0.2967 36 Nam Định 2004 0.3119 0.014619696 36 Nam Định 2006 0.3109 0.024313596 0.014619696 36 Nam Định 2008 0.3224 0.024388631 0.013865752 36 Nam Định 2010 0.3207 0.025111662 0.0092377 37 Ninh Bình 2002 0.3021 0 37 Ninh Bình 2004 0.3177 0.000694972 pl n ua al n Hải Phòng yi 31 ll fu oi m at nh 0.3001 0.011879109 z z 0.029764413 vb 0.049599555 0.011879109 0.022189251 ht k jm 0 gm om l.c 0.021647612 0.073046017 n a Lu n va y te re th 53 ng hi ep time year gini inc 37 Ninh Bình 2006 0.3499 0.001441153 0.000694972 37 Ninh Bình 2008 0.3551 0.008636086 0.00096037 37 Ninh Bình 2010 0.3457 Thanh Hố 2002 0.3090 0 Thanh Hoá 2004 0.3147 0 2006 0.3238 0.003053282 0.077695635 0.003053282 tinh n t to Fdi tinh id w y th 38 ad 38 lo 38 Thanh Hoá stock/GDp Lag(FDI/GDP) 0.007917704 2008 0.3314 38 Thanh Hoá 2010 0.3297 40 Nghệ An 2002 0.3393 0.008619323 40 Nghệ An 2004 0.3416 0.034978751 0.008619323 40 Nghệ An 2006 0.3558 0.026909148 0.028807543 40 Nghệ An 2008 0.3507 0.019322615 0.001327893 40 Nghệ An 2010 0.3516 0.018341051 0.001757509 42 Hà Tĩnh 2002 42 Hà Tĩnh 42 Hà Tĩnh 42 pl n ua al n yi Thanh Hoá va ju 38 0.07581887 ll fu oi m 2004 0.3425 2006 0.3508 Hà Tĩnh 2008 0.3505 0.030075072 42 Hà Tĩnh 2010 0.3567 0.145398027 0.029961598 44 Quảng Bình 2002 0.3136 0 44 Quảng Bình 2004 0.3205 44 Quảng Bình 2006 0.3214 44 Quảng Bình 2008 0.3297 0 44 Quảng Bình 2010 0.3560 0.02850437 45 Quảng Trị 2002 0.3252 45 Quảng Trị 2004 0.3272 45 Quảng Trị 2006 0.3544 0 45 Quảng Trị 2008 0.3415 0.007053486 45 Quảng Trị 2010 0.3477 0.012272568 0.007053486 46 Thừa Thiên - Huế 2002 0.3401 0 at nh 0.3517 z z 0.000181206 k jm ht vb 0.000181206 gm om l.c n a Lu n va y te re th 54 Thừa Thiên - Huế 2004 0.3215 0 46 Thừa Thiên - Huế 2006 0.3343 0.086397115 46 Thừa Thiên - Huế 2008 0.3494 0.094669135 0.086397115 Thừa Thiên - Huế 2010 0.3316 0.107666007 0.039762529 2002 0.3134 0.045474771 Đà Nẵng 2004 0.3141 0.155095734 0.045474771 48 Đà Nẵng 2006 0.3161 0.183326856 0.123469168 48 Đà Nẵng 2008 0.3305 0.222073675 0.068013991 48 Đà Nẵng 2010 0.3565 0.223432153 0.105635819 49 Quảng Nam 2002 0.2926 0 49 Quảng Nam 2004 0.3070 0 49 Quảng Nam 2006 0.3136 0.040523091 49 Quảng Nam 2008 0.3203 0.079412406 0.040523091 49 Quảng Nam 2010 0.3272 0.10787054 0.054779584 51 Quảng Ngãi 2002 0.3001 0 51 Quảng Ngãi 2004 0.3038 0 51 Quảng Ngãi 2006 0.3173 0.00308856 51 Quảng Ngãi 2008 0.3167 0.145411541 0.00308856 51 Quảng Ngãi 2010 0.3300 0.113133432 0.143523079 52 Bình Định 2002 0.3111 52 Bình Định 2004 0.3302 52 Bình Định 2006 0.3332 0.003190549 52 Bình Định 2008 0.3344 0.006929935 0.003190549 52 Bình Định 2010 0.3422 0.012597938 0.004913014 54 Phú Yên 2002 0.3355 0 54 Phú Yên 2004 0.3396 0 54 Phú Yên 2006 0.3446 0.055505826 54 Phú Yên 2008 0.3366 0.179452568 0.055505826 54 Phú Yên 2010 0.3433 0.223796456 0.143971063 w Đà Nẵng y th 48 ad 48 lo 46 yi pl n ua al n 46 gini inc vb ep year va hi time ju ng tinh n t to Fdi tinh id stock/GDp Lag(FDI/GDP) ll fu oi m at nh z z k jm ht gm om l.c n a Lu n va y te re th 55 ng hi ep time year gini inc 56 Khánh Hoà 2002 0.3151 56 Khánh Hoà 2004 0.3533 56 Khánh Hoà 2006 0.3618 0.012116992 Khánh Hoà 2008 0.3610 0.028471455 0.012116992 Khánh Hoà 2010 0.3647 0.025505346 0.020391796 2002 0.4148 0 tinh n t to Fdi tinh id w y th 58 ad 56 lo 56 Ninh Thuận stock/GDp Lag(FDI/GDP) 2004 0.3902 0.004281738 58 Ninh Thuận 2006 0.3758 0.004481004 0.004281738 58 Ninh Thuận 2008 0.3886 0.067563586 0.001280287 58 Ninh Thuận 2010 0.4012 0.103800435 0.064813906 60 Bình Thuận 2002 0.2958 60 Bình Thuận 2004 0.2998 60 Bình Thuận 2006 60 Bình Thuận 2008 60 Bình Thuận 62 Kon Tum 62 pl n ua al n yi Ninh Thuận va ju 58 ll fu 0.009549738 0.3161 0.019840724 0.009549738 2010 0.3089 0.02704733 0.014029069 2002 0.2701 Kon Tum 2004 0.3235 62 Kon Tum 2006 0.3217 62 Kon Tum 2008 0.3393 62 Kon Tum 2010 0.3476 0.001617355 64 Gia lai 2002 0.3594 64 Gia lai 2004 0.3762 0 64 Gia lai 2006 0.3818 0 64 Gia lai 2008 0.3828 0 64 Gia lai 2010 0.3821 0.020466533 66 Đắc Lắc 2002 0.3370 0 66 Đắc Lắc 2004 0.3763 0 66 Đắc Lắc 2006 0.3787 0 66 Đắc Lắc 2008 0.3842 0 oi m 0.2931 at nh 0 z vb z 0 k jm ht gm om l.c n a Lu n va y te re th 56 hi ep year gini inc 66 Đắc Lắc 2010 0.3763 0 67 Đắc Nông 2002 0.0000 0 67 Đắc Nông 2004 0.3952 0 Đắc Nông 2006 0.3943 0 Đắc Nông 2008 0.3988 0.006316443 Đắc Nông 2010 0.4004 0.009969875 0.006316443 time ju ng tinh n t to Fdi tinh id w y th 67 ad 67 lo 67 stock/GDp Lag(FDI/GDP) 2002 0.3719 0 68 Lâm Đồng 2004 0.3527 0 68 Lâm Đồng 2006 0.3646 0.029405032 68 Lâm Đồng 2008 0.3541 0.036301559 0.029405032 68 Lâm Đồng va 2010 0.3786 0.048484669 0.019491083 70 Bình Phước 2002 0.3311 70 Bình Phước 2004 0.3119 70 Bình Phước 2006 70 Bình Phước 2008 0.3249 70 Bình Phước 2010 0.3597 72 Tây Ninh 2002 0.2777 72 Tây Ninh 2004 0.3398 72 Tây Ninh 2006 0.3421 72 Tây Ninh 2008 0.3444 0.096140824 72 Tây Ninh 2010 0.3603 0.175912529 74 Bình Dương 2002 0.3081 0.468492624 74 Bình Dương 2004 0.3330 0.814029033 0.468492624 74 Bình Dương 2006 0.3401 1.041117906 0.508083507 74 Bình Dương 2008 0.3382 1.097969252 0.484629722 74 Bình Dương 2010 0.3921 0.916245783 0.410726338 75 Đồng Nai 2002 0.3544 0 75 Đồng Nai 2004 0.3393 0 75 Đồng Nai 2006 0.3343 0.203450389 pl n ua al n Lâm Đồng yi 68 ll fu oi m at nh 0.3213 0.018352969 z z 0.035051854 0.018352969 vb 0 0 k jm ht gm om l.c 0.096140824 n a Lu n va y te re th 57 ep 75 Đồng Nai 2008 0.3420 0.397370773 0.203450389 75 Đồng Nai 2010 0.3366 0.499543063 0.25982647 77 Bà Rịa-Vũng Tàu 2002 0.3507 Bà Rịa-Vũng Tàu 2004 0.3872 Bà Rịa-Vũng Tàu 2006 0.3903 0 77 2008 0.3847 0.052045268 77 Bà Rịa-Vũng Tàu 2010 0.3866 0.182721756 0.052045268 79 TP Hồ Chí Minh 2002 0.3320 0 79 TP Hồ Chí Minh 2004 0.3475 0 79 TP Hồ Chí Minh 2006 0.3497 0.058340374 79 TP Hồ Chí Minh 2008 0.3585 0.116670551 0.058340374 79 TP Hồ Chí Minh 2010 0.3542 0.156178275 0.078003082 80 Long An 2002 0.3170 0 80 Long An 2004 0.3280 0 80 Long An 2006 0.3266 0.113020688 80 Long An 2008 0.3389 80 Long An 2010 0.3458 82 Tiền Giang 2002 0.3209 82 Tiền Giang 2004 0.3318 82 Tiền Giang 2006 0.3340 0.000266268 82 Tiền Giang 2008 0.3531 0.018771173 82 Tiền Giang 2010 0.3537 0.029966698 0.018613699 83 Bến Tre 2002 0.2898 0 83 Bến Tre 2004 0.3365 0.014672171 83 Bến Tre 2006 0.3373 0.022107662 0.014672171 83 Bến Tre 2008 0.3367 0.036414934 0.010601789 83 Bến Tre 2010 0.3650 0.080519771 0.021647872 84 Trà Vinh 2002 0.3494 84 Trà Vinh 2004 0.3597 w ad 77 lo 77 Bà Rịa-Vũng Tàu ju yi pl n ua al n gini inc year va hi time y th ng tinh n t to Fdi tinh id stock/GDp Lag(FDI/GDP) ll fu oi m at nh z z 0.186903355 0.113020688 vb 0.121389091 ht k jm 0 gm om l.c 0.000266268 n a Lu n va y te re th 58 ng hi ep time year gini inc 84 Trà Vinh 2006 0.3639 0.010008752 84 Trà Vinh 2008 0.3732 0.024922051 0.010008752 84 Trà Vinh 2010 0.3775 0.036835541 0.017854604 Vĩnh Long 2002 0.3325 0 Vĩnh Long 2004 0.3315 0 Vĩnh Long 2006 0.3226 0.013146182 tinh ju t to Fdi tinh id w n y th 86 ad 86 lo 86 stock/GDp Lag(FDI/GDP) 2008 0.3298 0.026040993 0.013146182 86 Vĩnh Long 2010 0.3311 0.032746531 0.018087816 87 Đồng Tháp 2002 0.3881 0 87 Đồng Tháp 2004 0.3869 0 87 Đồng Tháp va 2006 0.3860 0 87 Đồng Tháp 2008 0.3834 0 87 Đồng Tháp 2010 0.3659 0 89 An Giang 2002 0.3671 0.000285359 89 An Giang 2004 0.3517 0.000225186 0.000285359 89 An Giang 2006 0.3521 89 An Giang 2008 0.3531 0.000265735 89 An Giang 2010 0.3613 0.000496643 91 Kiên Giang 2002 0.3898 91 Kiên Giang 2004 0.3801 91 Kiên Giang 2006 0.3783 0.015644298 91 Kiên Giang 2008 0.3960 0.012750735 0.015644298 91 Kiên Giang 2010 0.3916 0.010660925 0.003347068 92 Cần Thơ 2002 0.3561 0 92 Cần Thơ 2004 0.3016 0 92 Cần Thơ 2006 0.3074 0.006093892 92 Cần Thơ 2008 0.3350 0.031699579 0.006093892 92 Cần Thơ 2010 0.3425 0.0323577 0.028376609 93 Hậu Giang 2002 0.0000 pl n ua al n Vĩnh Long yi 86 ll fu oi m at nh z z 0.000165997 1.87103E-05 0.000169578 k jm ht vb 1.10312E-06 gm om l.c n a Lu n va y te re th 59 hi ep year gini inc 93 Hậu Giang 2004 0.3212 93 Hậu Giang 2006 0.3429 0 93 Hậu Giang 2008 0.3579 0.264311889 Hậu Giang 2010 0.3626 0.21410097 0.264311889 Sóc Trăng 2002 0.3743 0 Sóc Trăng 2004 0.3532 0 time ju ng tinh n t to Fdi tinh id w lo 93 ad 94 y th 94 stock/GDp Lag(FDI/GDP) 2006 0.3594 0.00100287 94 Sóc Trăng 2008 0.3735 0.003450141 0.00100287 94 Sóc Trăng 2010 0.3764 0.00221983 0.002849971 95 Bạc Liêu 2002 0.3031 95 Bạc Liêu va 2004 0.3402 95 Bạc Liêu 2006 0.3507 0.021059437 95 Bạc Liêu 2008 0.3609 0.018317113 0.021059437 95 Bạc Liêu 2010 0.013080247 0.003241967 96 Cà Mau 2002 0.3719 96 Cà Mau 2004 0.3465 96 Cà Mau 2006 0.3594 96 Cà Mau 2008 0.3587 0.004765348 96 Cà Mau 2010 0.3678 0.003557878 0.004765348 pl n ua al n Sóc Trăng yi 94 ll fu oi m at nh 0.3576 z z vb k jm ht gm Table 6: Summary statistic of variables om l.c Variables Mean Std Dev Min Max time 289 2.9931 1.4142 giniinc 289 0.3419 0.0399 - 0.4233 fdistockgdp 238 0.0662 0.1425 - 1.0980 fdistockgdplag 185 0.0554 0.1388 - 1.0980 n a Lu Obs n va y te re th 60 t to ng hi Table 7.1: Results of Pool OLS ep w n lo ad ju y th yi pl n ua al n va ll fu oi at nh Model m Table 7.2: Result run Random Effect z z k jm ht vb om l.c gm n a Lu n va y te re th 61 t to Table 7.3: Result of Fixed Effect Model ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z Table 8: Result of Hausman Test z vb Coefficients ht (b) (B) (b-B) sqrt(diag(V_b-V_B) fixed random Difference time 0.007 0.007 0.000 fdistockgdp -0.063 -0.054 -0.008 -0.009 fdistockgdplag 0.032 0.035 -0.003 0.003 k jm Variables gm 0.000 om l.c n a Lu Chi_Square (3) = (b-B)'(V_b-V_B)^(-1)(b-B) = 1.58 S.E n va Prob>Chi_square = 0.664 y te re th 62 t to ng hi Table 9: Summary of two new regression for Fixed and Random Effect ep Variables Random Effect Model 0.006* 0.006* (0.000) (0.000) 0.001 0.003 (0.012) (0.014) 0.325* 0.325* w Fixed Effect Model n lo ad ju y th Time yi pl n ua al FDI stock in GDP_hat n va ll fu _cons (0.004) oi m (0.002) nh Sigma_e 0.009 0.022 z 0.022 at Sigma_u z vb 0.009 k jm ht om l.c gm n a Lu n va y te re th 63 t to C- Figure of endogeneity test and solution: Figure 1: IV estimator 2SLS ng xtset hi ep tinhid time panel variable: time variable: delta: tinhid (unbalanced) time, to unit ivregress 2sls giniinc time i.tinhid (fdistockgdp = L.fdistockgdp) Instrumental variables (2SLS) regression w Number of obs Wald chi2(59) Prob > chi2 R-squared Root MSE n lo ad Coef .0078595 0063924 027767 0010464 0.28 6.11 0.777 0.000 -.0465628 0043414 0622819 0084434 tinhid 10 12 14 15 17 19 20 22 24 25 26 27 30 31 33 34 35 36 37 38 40 42 44 45 46 48 49 51 52 54 56 58 60 64 67 68 70 72 74 75 77 79 80 82 83 84 86 89 91 92 93 94 95 96 0040798 -.0152334 -.0447277 -.00093 -.0207518 -.0357137 -.0464287 -.0254773 -.0187916 -.0282571 -.0429793 -.0676985 -.0379076 -.0641518 -.0338038 -.0750874 -.0070698 -.0665471 -.0762417 -.0689604 -.073077 -.0436194 -.0614027 -.037958 -.0411694 -.0558434 -.0495557 -.0540547 -.0599277 -.07111 -.0712514 -.052732 -.0475638 -.0314419 0009087 -.0817641 -.0070026 0094556 -.0254117 -.0378515 -.0415719 -.0444402 -.0517994 -.0093524 -.0358631 -.0541102 -.0408713 -.0441144 -.0189725 -.0566271 -.0331396 -.0003718 -.0662002 -.0357098 -.0220755 -.0349532 -.029504 0074916 0095508 0087262 0079656 0084374 0094932 0080545 0092847 0081519 0072522 0078422 0089956 0105179 0073833 0069794 0069857 0069961 0073826 0090065 0083352 0083938 0083159 0080383 0078769 0084839 0081177 0094146 0073594 0070607 0075049 0074215 0081383 0070723 009172 0076332 0092201 0081464 0081614 0078302 0108724 0073971 0235665 0077121 0082531 0072708 0074718 0092075 0077095 0091202 0081981 0082165 009385 0079737 0081527 0081963 009328 0112736 0.54 -1.59 -5.13 -0.12 -2.46 -3.76 -5.76 -2.74 -2.31 -3.90 -5.48 -7.53 -3.60 -8.69 -4.84 -10.75 -1.01 -9.01 -8.47 -8.27 -8.71 -5.25 -7.64 -4.82 -4.85 -6.88 -5.26 -7.34 -8.49 -9.48 -9.60 -6.48 -6.73 -3.43 0.12 -8.87 -0.86 1.16 -3.25 -3.48 -5.62 -1.89 -6.72 -1.13 -4.93 -7.24 -4.44 -5.72 -2.08 -6.91 -4.03 -0.04 -8.30 -4.38 -2.69 -3.75 -2.62 0.586 0.111 0.000 0.907 0.014 0.000 0.000 0.006 0.021 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.312 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.001 0.905 0.000 0.390 0.247 0.001 0.000 0.000 0.059 0.000 0.257 0.000 0.000 0.000 0.000 0.037 0.000 0.000 0.968 0.000 0.000 0.007 0.000 0.009 -.0106036 -.0339527 -.0618307 -.0165422 -.0372888 -.0543199 -.0622153 -.043675 -.034769 -.0424712 -.0583497 -.0853296 -.0585223 -.0786227 -.0474832 -.0887792 -.020782 -.0810167 -.0938941 -.0852972 -.0895284 -.0599181 -.0771575 -.0533964 -.0577975 -.0717538 -.0680079 -.0684788 -.0737663 -.0858193 -.0857973 -.0686829 -.0614252 -.0494188 -.0140521 -.0998352 -.0229692 -.0065405 -.0407587 -.059161 -.05607 -.0906297 -.0669148 -.0255282 -.0501137 -.0687547 -.0589177 -.0592246 -.0368477 -.0726952 -.0492436 -.0187661 -.0818284 -.0516889 -.0381399 -.0532357 -.0515999 0187632 003486 -.0276247 0146822 -.0042149 -.0171074 -.0306422 -.0072796 -.0028142 -.014043 -.0276088 -.0500674 -.017293 -.0496808 -.0201243 -.0613956 0066423 -.0520774 -.0585893 -.0526237 -.0566255 -.0273206 -.0456478 -.0225195 -.0245412 -.0399329 -.0311035 -.0396305 -.0460891 -.0564006 -.0567056 -.0367811 -.0337023 -.0134651 0158695 -.063693 0089641 0254518 -.0100648 -.016542 -.0270738 0017494 -.036684 0068234 -.0216125 -.0394658 -.022825 -.0290041 -.0010973 -.0405591 -.0170357 0180225 -.050572 -.0197308 -.0060111 -.0166707 -.0074081 56.46 0.000 ju y th giniinc fdistockgdp time yi pl n ua al z P>|z| ll fu oi [95% Conf Interval] at nh z z k om n a Lu 3779954 n va y te re th fdistockgdp time 4.tinhid 6.tinhid 8.tinhid 10.tinhid 12.tinhid 14.tinhid 15.tinhid 17.tinhid 19.tinhid 20.tinhid 22.tinhid 24.tinhid 25.tinhid 26.tinhid 27.tinhid 30.tinhid 31.tinhid 33.tinhid 34.tinhid 35.tinhid 36.tinhid 37.tinhid 38.tinhid 40.tinhid 42.tinhid 44.tinhid 45.tinhid 46.tinhid 48.tinhid 49.tinhid 51.tinhid 52.tinhid 54.tinhid 56.tinhid 58.tinhid 60.tinhid 64.tinhid 67.tinhid 68.tinhid 70.tinhid 72.tinhid 74.tinhid 75.tinhid 77.tinhid 79.tinhid 80.tinhid 82.tinhid 83.tinhid 84.tinhid 86.tinhid 89.tinhid 91.tinhid 92.tinhid 93.tinhid 94.tinhid 95.tinhid 96.tinhid L.fdistockgdp l.c gm 3526322 jm ht vb 0064703 m 3653138 n va _cons Instrumented: Instruments: Std Err = 179 = 1654.57 = 0.0000 = 0.9022 = 00802 64 t to Figure 2: First-stage regression and instruments are weak test estat firststage ng First-stage regression summary statistics hi ep Variable R-sq Adjusted R-sq Partial R-sq F(1,119) fdistockgdp 0.9513 0.9272 0.2802 46.326 Prob > F 0.0000 w n lo Minimum eigenvalue statistic = 46.326 ad # of endogenous regressors: # of excluded instruments: ju y th Critical Values Ho: Instruments are weak 5% 10% 20% (not available) yi 2SLS relative bias pl 10% 16.38 16.38 15% 8.96 8.96 30% 20% 6.66 6.66 25% 5.53 5.53 n ua al 2SLS Size of nominal 5% Wald test LIML Size of nominal 5% Wald test 1 n va ll fu Figure 3: Endogeneity Test oi m estat endogenous at nh Tests of endogeneity Ho: variables are exogenous 5.14995 3.49551 (p = 0.0232) (p = 0.0640) z = = z Durbin (score) chi2(1) Wu-Hausman F(1,118) ht vb k jm Figure 4: Regression for FDI stock in GDP by lagged of FDI stock in GDP Source SS df gm reg fdistockgdp L.fdistockgdp MS 3.91666543 002756787 Total 4.40461678 178 024745038 n a Lu 177 om 3.91666543 487951357 = 179 = 1420.74 = 0.0000 = 0.8892 = 0.8886 = 05251 l.c Model Residual Number of obs F( 1, 177) Prob > F R-squared Adj R-squared Root MSE Std Err _cons 0240841 0042106 37.69 0.000 1.001211 1.111843 5.72 0.000 0157746 0323936 th 0280301 [95% Conf Interval] y 1.056527 P>|t| te re fdistockgdp L1 t n Coef va fdistockgdp 65