(Luận văn) an analysis of foreign direct investment impact on labor productivity at firm level in vietnam

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE ng VIETNAM THE NETHERLANDS hi ep =====oOo===== VIETNAM- NETHERLANDS w n PROJECT FOR M.A IN DEVELOPMENT ECONOMICS lo ad y th ju AN ANALYSIS OF FOREIGN DIRECT INVESTMENT yi pl IMPACT ON LABOR PRODUCTIVITY AT FIRM LEVEL ua al IN VIETNAM n n va ll fu oi m IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ART IN DEVELOPMENT ECONOMICS at nh z z vb BO GIAO DUC DAO TAO TRU'ONG D.l;\1 HQC KINH TE'TP.HCM THUVIEN • k jm PHAM KHAC DUY ht BY om ACADEMIC SUPERVISOR: DR LE THI THANH LOAN l.c gm ~g an Lu n va ey t re Ho Chi Minh City, November 2009 CERTIFICATION ng I hereby certify that the substance of this thesis has not been submitted for any degrees hi and is not being currently submitted for any other degrees ep I also certify that, to the best of my knowledge, and any help received in preparing the w n thesis and all sources used have been acknowledged in the thesis lo ad ju y th Signature yi pl n ua al va amKhacDuy n ll fu Date: November, 2009 oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re ACKNOWLEDGEMENT ng This research is impossibly completed without the valuable guidance, encouragement and hi ep advice from numerous individuals including Vietnam-Netherlands program lecturers, friends and my family members I am really indebted and grateful to what they have done w for my thesis completion n lo ad First of all, I would like to send my deepest gratitude to my supervisor, Dr Le Thi Thanh ju y th Loan who always gives valuable instructions, advice and comments during my completion ofthe thesis yi pl al I am grateful for Professor, Peter Calkins for his precious advice and comments from the n ua initial ideas ofthe theme for my thesis va n I also send my special thanks to Professor, Nguyen Trong Hoai for his lectures in ll fu econometrics and Mr Truong Thanh Vu, the lecturer of Vietnam-Netherlands project, for oi m his kind help and instructions in data analysis by Stata software nh Many especially respectful thanks are sent to my parents and my dear wife for at z encouraging and providing me with an opportunity to pursue my desires in higher z vb learning and for their love, affection and sympathy that have helped me to gain more jm ht strength and motive to complete this thesis k And fmally, I would like to express my special thanks to my friends in MDE class 14 for gm continuous support during my research completion om l.c their supportive friendship from the beginning day I joined in this course and their who support me a lot in this thesis completion if I forget to mention their names an Lu Above all, please sympathize for me and know that I would be so grateful for those n va ey t re t ii ABSTRACT This research examines and analyses the impact ofFDI on labor productivity at firm level ng in Vietnam through applying cross-sectional data from VES-2008 which concentrate on hi ep 4,654 firms including FDI and domestically owned enterprises in sub-industrial sectors; food processing, hotels - restaurants, electronics - mechanics and textile - garment - w n footwear The regression model is estimated based on the Cobb-Douglas production lo function and the labor productivity is modeled as dependent on the variables, namely ad y th capital intensity, material input cost per labor, proportion of skilled labor and dummy ju variables including types of ownership and regions that FDI enterprises locate OLS yi (Ordinary Least Square) and various econometric estimation techniques are employed in pl order to obtain reliable and appropriate results that show the findings based on the al n ua scientific analysis As results, finding results in analysis of FDI impact on labour va productivity in the case of this study consequently suggest in general that FDI in sub- n industrial sectors plays an important and positive role in enhancing labor productivity at fu ll firm level in Vietnam Moreover, the results seem to be appropriate to answer research's m oi questions as well as confirm expectation for hypotheses of different impacts of FDI at nh across regions and types of ownership, except for skilled labor that does not appear to affect on labor productivity in this research z z ht vb k jm om l.c gm n a Lu n va y te re t iii TABLE OF CONTENTS CHAPTER 1: INTRODUCTION ng Problem statement I 1.2 Objectives of the research hi 1.1 ep w lo Research hypotheses n 1.4 Research questions Organization of the research ad y th CHAPTER II: LITERATURE REVIEW Introduction 2.2 Concepts and definitions 2.2.1 Foreign direct investment (FDI) 2.2.2 Productivity and labor productivity 2.3 Economic theories , 2.3.1 Production theories 2.3.1.1 Cobb-Douglas production function ju 2.1 yi pl n ua al n va ll fu m oi 2.3.1.2 Pindyck and Rubinfeld production theory Theoretical background ofFDI impacts at nh 2.3.2 2.3 2.1 Channel effects of foreign direct investment 10 z z 2.3.2.2 Theoretical framework ofFDI impacts on labor productivity 11 vb jm ht 2.3.2.3 Suggested research model 13 Empirical studies 14 2.4.1 FDI impacts enhance labor productivity in host countries 14 2.4.2 The opposite results ofFDI impacts on labor productivity 16 k 2.4 l.c gm om CHAPTER III: AN OVERVIEW OF FDI IN VIETNAM SINCE 1988 18 Introduction 18 3.2 Overview of FDI inflows and periods of development from 1988 to 2008 18 3.2.1 FDI inflows in period 1988- 2008 18 3.2 Some characteristics ofFDI in Vietnam 20 3.3 The role ofFDI in national economy 25 3.4 The summary ofFDI sector's socio-economic affect on national economy 27 an Lu n va ey t re t iv CHAPTER IV: RESEARCH METHODOLOGY 29 ng hi 4.1 Introduction 29 4.2 Model specification 29 4.3 Description ofvariables 30 Dependent variable labor productivity (Labproductivity) 30 ep 4.3.1 Explanatory variables 30 4.3.2 w n 4.3.2.1 Capital intensity (Cap_intensity) 30 lo ad 4.3.2.2 Scale ofmaterial input cost (MI_scale) 31 y th 3 Labor quality (Skill) 31 ju 4.3.2.4 Firm's location (Dlocation) 31 yi 4.3.2.5 Types of ownership (Fshare) 32 pl ua al 4.3.2.6 Firm's sub-industrial sectors (Dindustry) 32 Data collection 33 4.5 Estimation strategy 34 4.6 Summary 36 n 4.4 n va ll fu m CHAPTER V: RESULT ANNALYSIS 37 Introduction 37 5.2 Descriptive statistic analysis of regression sample and variables 37 5.2.1 Descriptive statistics of sample 37 5.2.2 Descriptive statistics ofvariables 38 5.2.3 Correlation matrix 41 5.3 Model estimation and finding results 42 5.3.1 Multiple regression results and diagnostic tests 43 5.3.2 Interpretation ofthe fmding results 45 5.3.3 Analysis and discussion about the finding results 47 5.4 Conclusion 49 oi 5.1 at nh z z ht vb k jm om l.c gm Recommendations 50 6.3 Limitations of the research 52 y te re 6.2 n Conclusion 50 va 6.1 n a Lu CHAPTER VI: CONCLUSIONS AND RECOMMENDATION 50 t v REFFERENCES 53 APPENDICES: 56 ng APPENDIX 1: , , 56 hi APPENDIX 2: 61 ep APPENDIX 3: 62 w n LIST OF BOXES lo ad BOX 5.1: Ramsey RESET test using powers of the independent variables .43 y th ju BOX 5.1: Breusch-Pagan I Cook-We is berg test for heteroskedasticity 44 yi pl ua al LIST OF FIGURES n FIGURE 3.1: Foreign direct investment projects licensed in period 1988- 2008 19 va n FIGURE 3.2: Foreign direct investment projects licensed in period 1988 - 2008 by ll fu region 23 oi m FIGURE 3.3: Structure of investment at current prices by types of ownership from 1995 nh - 2008 24 at FIGURE 3.4: Structure of investment at current prices by types of ownership in 2008 24 z z FIGURE 3.5: Structure of gross domestic product at current prices by ownership period vb 1995- 2008 26 ht jm FIGURE 5.1: Correlation between proportion of skilled labor and labor productivity .42 k FIGURE 5.2: Distribution of labor productivity (Labproductivity) before transforming gm into logarithm form 56 om l.c FIGURE 5.3: Distribution oflabor productivity in logarithm form 57 FIGURE 5.4: Distribution of Capital intensity in logarithm form 59 FIGURE 5.6: Distribution of proportion or skilled labor in logarithm form 60 n a Lu FIGURE 5.5: Distribution of material input cost per labor in logarithm form 59 n va y te re th vi LIST OF TABLES TABLE 3.1: Foreign direct investment projects licensed from 1988 to 2008 by kind of ng economic activity 21 hi ep TABLE 3.2: Employed population as of annual I July by ownership from 2000-2008 27 TABLE 5.1: Statistics summary of four sub-industries firms in regions according to three w n types of ownership 37 lo ad TABLE 5.2: Distribution oflabor productivity in logarithm form (Lnlabproductivity) 39 ju y th TABLE 5.3: Distribution of explanatory variables in logarithm form 40 TABLE 5.4: Distribution of skilled labor in sub-industries according to ownership 40 yi pl TABLE 5.5: Correlation matrix from the variables in the regression function 42 ua al TABLE 5.6: The result ofrunning regression (Model5.1) 43 n TABLE 5.7: Diagnostic test for multicollinearity 44 va TABLE 5.8: The result of running regression (Model5.2) 45 n ll fu TABLE 5.9: Distribution oflabor productivity (Labproductivity) before transforming oi m into logarithm form 56 TABLE 5.10: Distribution oflabor productivity in logarithm form (Lnlabproductivity) 57 nh at TABLE 5.11: Distribution of explanatory variables in logarithm form 58 z TABLE 5.12: Descriptive statistics ofvariables in three types ofenterprises 61 z ht vb TABLE 5.13: The result of regression with beta number (Model5.3) 62 k jm om l.c gm n a Lu n va y te re t vii ACRONYMS ng hi ASEAN Association of South East-Asian Nations APEC Asia-Pacific Economic Cooperation Best Linear Unbiased Estimator ep BLUE Bilateral Trade Agreement BTA w Foreign Direct Investment n FDI Gross Domestic Product General Enterprise's Cost Survey ju y th GECS Fixed Effects ad GDP lo FE GO yi GSO General Statistics Office IC Intermediate Cost IMF International Monetary Fund NGO Non-Governmental Organization NICs Newly Industrial Countries OECD Organization for Economic Co-operation and Development OLS Ordinary Least Square RE Random Effects RESET Regression Specification Error Test SUR Seemingly Unrelated Regression us United States USD United States Dollar VA Value Added VES Vietnam Enterprise Survey VIF Variance Inflation Factor VND Vietnamese Dong WTO World Trade Organization Gross Output 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 ey t re t viii CHAPTER I INTRODUCTION ng hi 1.1 Problem Statement ep Since the late 1980s, on the basis of Doi Moi or the government's socio-economic w reforms which started in 1986, Vietnam has initially transited from a centrally planned to n lo a market- oriented economy Typically for this process, Vietnam has advocated economic ad integration, in addition to its five "tions": urbanization, globalization, industrialization, y th modernization and privatization to spearhead this process Beginning with the ju yi promulgation of the Law on Foreign Investment in 1987 and the signing of bilateral and pl multilateral trade agreements, Vietnam became a member of the Association of South al ua East-Asian Nations (ASEAN) in 1995 and joined the Asia-Pacific Economic Cooperation n (APEC) in 1998 In July 2000, Vietnam signed the Vietnam-US Bilateral Trade va n Agreement (BTA) and then joined Asia Europe Meeting in the following year, 2001 The fu most recent and notable event was Vietnam's WTO integration in 2007 ll m oi During the economic transition from after 1986 to current years, many observers, policy nh at makers and academics contend that foreign direct investment (FDI) played a crucial role z which can help jumpstart to Vietnam's economy on its way to accelerating reform and z vb socio-economic growth, Mai (2004) In addition, FDI may affect all economic, cultural ht and social aspects of the economy and is an indispensable capital source to developing jm k countries including Vietnam, especially Asia's Newly Industrializing Countries (NICs) om l.c and fiscal gaps and hence promote socio-economic growth, Taylor (1993) gm Through FDI flows, these countries can cover the saving-investment, foreign exchange It may seem natural to argue that FDI can convey great advantages to host countries a Lu That is why policymakers of developing countries including Vietnam always pay much y t te re impact of FDI on the labor productivity at firm level in Vietnam as a whole and to n Vietnam's socio-economic growth in a general respect, this research wants to test the va does not focus on FDI by examining the effects of foreign direct investment on n attention to effects from FDI flows to country's economic growth However this study 5.3.3 Analysis and discussion about the finding results The fmding results almost reasonably answer to the expectations from this research when the capital intensity and material purchase cost per labor are positive and significant This ng hi is explained from result of Vietnam's WTO joining and therefore, it became a main ep driving force for FDI enterprises to raise their large capital investment that gives impacts on the increase in labor productivity of firms including FDI and domestically owned w n firms in Vietnam According to Ludo (2008), he stated that more inward FDI will give lo ad rise to an increase in the capital stock, which in turn will raise labor productivity This y th statement is really consistent with the finding results as shown by the positive and ju significant coefficients on the capital intensity and material input cost variable in the yi estimation results in this research pl al ua However the result showed a surprising fmding that the proportion of skilled labor n seemingly does not have impact on labor productivity This may be explained by labor va n intensity of FDI enterprises in the sub-industries of the research The typical evidence ll fu for this is the low ratio of skilled labor in food processing, textile-garment-footwear and oi m electronic-mechanics that just require relatively low skills and educational levels as well nh as use cheap and short-term training employees in Vietnam Therefore, they need less at demand for skilled labor Albeit, the coefficient of Dlocation is positive and statistically z z significant which shows that the firms' concentration in big cities have higher labor ht vb productivity This is explained by more favorable infrastructures, close distance to jm consumer market and more comfortable business environment for enterprises than the k other regions In other word, with such convenient conditions, firms can reduce many gm kinds of cost and this is really one of the main results in enhancing more labor om l.c productivity compared with other regions In addition, all coefficients of industry dummies are statistically significant; there are explicit differences on labor productivity complete implication from policy aspect, it sheds lights for the valuable insights and clear y th 48 te re productivity is statistically significant and totally consistent with the theoretical n type of those industries in Vietnam Although, results of FDI impact on labor va implication in methodology aspect to realize the contribution of the impact from each n a Lu among sub-industries of the research However this fmding seems not to express framework and empirical studies as well as research's expectation Its impacts are not really exceeded of that non-state enterprise This can be explained for results of labor turnover, technologies and capital spillover from FDI enterprises to domestic firms that ng can improve and adjust appropriately with international integration, Anh et al (2006) hi ep 5.1 Conclusion w In summary, this chapter analyzed and discussed the impacts of FDI and domestically n lo owned enterprises on labor productivity at firm level in Vietnam by applying both ad descriptive statistics and econometric models Based on the theoretical framework and y th empirical studies, explanatory variables employed in the multiple regressions are ju identified, critically discussed and analyzed in order to answer research questions as well yi pl as confirm the hypotheses results that indicate the finding results of the research are al n scientifically analytical basis ua reliable, useful Besides, the finding results are also analyzed and explained based on n va ll fu oi m at nh z z ht vb k jm om l.c gm n a Lu n va y te re th 49 CHAPTER VI CONCLUSIONS AND RECOMMENDATIONS ng hi 6.1 Conclusion ep The anticipated fmding results in analysis of FDI impact on labour productivity at firm w level in Vietnam from this study consequently suggest in general that FDI in sub- n lo industrial sectors plays an important and positive role in enhancing labor productivity ad This finding gives a reasonable answer to the first question as mentioned in the chapter y th one Besides that, fmding results also show there are significant differences and gaps of ju yi impacts on labor productivity across regions as well as sub-industries in the case of this pl research Moreover, the fmding is that capital and material inputs intensity are really al ua significant determinants of productivity at firm level in Vietnam Furthermore, once n again the research emphasizes the extremely important role of FDI capital not only in va n increasing labor productivity but also in promoting economic development in developing fu ll countries such as Vietnam Especially, through Foreign Direct Investment, the host m countries can obtain not only necessary capital, but modern technology, management and oi nh marketing skills as well The presence of FDI frrms facilitates competition between at enterprises in the host countries, which put pressures on domestically owned frrms to use z z resources more efficiently, improve technology as well as management methods and in vb turn improve labor productivity as a whole However, the fmdings that skilled labor does ht jm not appear to affect labor productivity and FDI frrms not make the most productive in k increasing labor productivity compared with non-state owned frrms are rather different gm l.c from the expectation of the research hypothesis, despite significant differences and gaps among these types of ownerships The result illustrates that non-state owned frrms in om Vietnam are considerably improved and adjusted to adapt to new business conditions va 6.2 an Lu under the context of the international integration Recommendations n ey t re th so The useful and reliable results of this study aim to help Vietnamese government's policymakers in planning effective policies to improve local labor productivity that can serve to develop and monitor the effects of FDI on local labor market policies In ng hi addition, this research help them to have a widen vision of gap of labor productivity as ep well as unequally competitive abilities between domestic firms (especially state-owned enterprises) and FDI firms in order to issue appropriate policies to narrow these gaps w n lo Typically, the insignificant impacts of skilled labor on the overall labor productivity ad imply that Vietnam, in the short run, may accept FDI firms that tend to apply labor- y th intensive industries or technologies to use the labor force, which is abundant and relative ju cheap in developing countries including Vietnam However, in the long run, Vietnam yi pl should pay more attention to narrowing the capital and technology gaps between al ua domestic and foreign firms through concessionary and subsidiary policies to help these n firms in renovating technologies, machines and subsidize capital sources with favorable va interest rates etc so that local firms can have better conditions and time to catch up and n oi m the international markets ll fu compete with FDI firms in domestic markets as well as to compete with foreign firms in at nh In addition, improving the skills of local labor is very important because it seems that under the context of strict competition from international integration, such unskilled or z z relative cheap labor like Vietnam will no longer be a competitive factor or advantage to vb jm ht attract FDI as well as face with huge inflows of big foreign enterprises' competition in the near future Thus, the Vietnamese government should concentrate on developing k gm necessary skills for local labor through improving educational quality in universities, l.c colleges, and vocational -training center·s It means that education in Vietnam needs to om catch up with what is happening in the practice that can lead to a result that domestic labor can be ready to contribute their knowledge and abilities to country's development an Lu after graduating n va Furthermore, the research findings are helpful to policymakers to improve or develop ey This suggests that in order to assure equitable development among the regions, the t re further current policies in attracting FDI to promote investment in less developed regions t 51 government should encourage investors illcluding foreign and domestic firms to invest in the relatively less developed regions such as mountainous provinces, the remote provinces in Mekong delta of Vietnam through policies as tax and investment incentives ng Besides, Vietnam's government should upgrade infrastructure systems and examine hi ep cautiously the expenditures ofthe national budget on improving roads, hospital, markets and schools so on to ensure that the national budget is invested rightly and efficiently in w n order to attract more investments as well as raise comparative advantages ofthese areas lo Those can be considered the prerequisite conditions to gain the equitable development ad across regions as well as to achieve sustainable long-term socio-economic development ju yi Limitations of the research pl 6.3 y th for Vietnam al n ua Although the data source used in the research which has been gained through VES- 2008 va from General Statistics Office of Vietnam is really updated and reliable, it still does have n some weaknesses The using of cross-sectional data seems not to capture completely the fu ll impact of FDI on labor productivity in a dynamic framework Because FDI impact in m oi Vietnam may be different from over period of time With this reason, future research at nh should concentrate to exploit and analyze FDI impact based on panel data or time-series data that can bring a more explicit result than this research Furthermore, the merging 100 z z percent foreign owned frrms and joint ventures into one type of ownership in this vb j ht research does not express the pure impacts of these two types that seemin.gly impacts of k m joint ventures may give more different results on labor productivity compared with other gm types of ownerships Thus they should be separated to achieve more obvious results l.c Besides, the research just divides the enterprises' location into two regions this fails to om capture the impact on productivity in detail for an individual province In the future this should be expanded at least into regions that can show a clearer picture of FDI impact an Lu in Vietnam n va ey t re a th 52 REFERENCE ng Aitken, B J and Harrison, A E (1999) Do Domestic Firms Benefit from Direct Foreign hi ep Investment?: Evidence from Venezuela, American Economic Review, Vol 89(3), pp 605-618 w Alfaro, L (2003) Foreign Direct Investment and Growth: Does the sector matter?, n lo Harvard Business School, the USA ad Anh, T T Nguyen, et al (2006) The Impact of Foreign Direct Investment on the y th Economic Growth in Vietnam, ClEM research report, Hanoi ju yi Blomstrom, M., and Kokko, Ari (1998) Multinational Corporations and Spillovers pl Centre for Economic Policy Research, CEPR Discuss Paper: No.1365 al n ua Blomstrom, M and Sjoholm, F (1999).Technology Transfer and Spillovers Does local Participation with Multinationals Matter?, NEB working paper 6816 va n Circular No 06/2001/TT-BLDTBXH of January 29, 2001 guiding the calculation of the fu ll average labor productivity growth rate and the average wage increase rate in State 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Foreign y th Acquisitions and Plant Performance in Indonesia Policy Research Working ju yi Paper Series, 3597, The World Bank · pl Kokko, A., et al (1996) Local Technological Capabilities and Productivity Spillovers al ua from FDI in the Uruguayan Manufacturing Sector, Journa:i of Development n Studies, Vol 32, pp.602-611 va n Lawrence, C H (2006) Statistics with Stata University ofNew Hampshire, Thompson ll fu Brooks/Cole, Canada oi m Lipsey, R E (2002) Home and Host Country Effects of FDI NBER Working Paper nh 9293 at Liu, Xiaming et al (2004) The impact ofForeign Direct Investment on Labor z z productivity in Chinese Electronics Industry, Lancaster University Management ht vb School, Working Paper: No 002 jm Ludo Cuyvers et al.(2008) Productivity Spillovers from Foreign Direct Investment in the k Cambodian Manufacturing Sector: Evidence from Establishment-Level Data, gm University of Abtawerp, Working paper: No 004 of Southeast Asian Studies Retrieved May 24th, 2009, from om l.c Mai, H Pham (2004) "FDI and Development in Vietnam: Policy Implications" Institute a Lu http://books google.com vn/books?id=IUareLnGVYcC&pg=PA2&lpg=PA2&dq=data+a n va 9ZXI40xPwg6irX s&hl=vi&ei=clcXSsn4NsSLkAXVnpjgDA&sa=X&oi=book result& n bout+FDI+in+Vietnam&source=bl&ots=tGQyJWxvow&sig=jMrq VF JK- y te re ct=result&resnum=8#PPA 1,M ac th 54 Miguel D Ramirez( ) Does Foreign Direct Investment Enhance Labor Productivity Growth In Chile?: A Co-integration Analysis Trinity College N goc, T P Duong (2008) Impact of R&D on the productivity growth of manufacturing ng firms in Vietnam, MAin Economics of Development thesis, p.3 hi ep OECD (1996) Benchmark Definition of Foreign Direct Investment, 3rd edition, Retrieved May 25th, 2009, from http://www.oecd.org/dataoecd/10/16/2090148.pdf w n OECD (2001) Measurement ofAggregate and Industry-Level Productivity Growth, lo Retrieved May 25th, 2009, from http://www.oecd.org/dataoecd/59/29/2352458.pdf ad y th Pindyck, R S and Rubinfeld, D L (1997) Microeconomics, Third edition, Mainland ju China: Prentice-Hall, Inc Retrieved October 4th, 2009, from yi http://www.mediafrre.com/?zfldjzmlt5o pl Taylor, L (1993) A Three-Gap Analysis ofForeign Resource Flows and Developing al n ua Country Growth, in Lance Taylor (ed.), The Rocky Road to Reform: Adjustment, n Cambridge va Income Distribution, and Growth in the Developing World, MIT Press: fu ll Tong, Y Sarah, and Hu, Y Angela (2003) Does domestic firms benefitfrom Foreign m oi Direct Investment? Initial evidence from Chinese manufacturing, working paper, at nh Faculty ofBusiness and Economics, The University of Hong Kong Vahter, Priit (2004) The Effect of Foreign Direct Investment on Labor Productivity: z z Evidence from Estonia and Slovenia Tartu: Tartu University Press vb ht Vani Archana, Ph.D (2000) Impact of FDI in India: State-Wise Analysis in a Panel Data jm Framework Indian Council for Research on International Economic Relations k gm (!CRIER) Indian Institute of Technology India Western College Pub Yingqi, Wei., et al (2004) The Impact of R&D, Export and FDI on Productivity in n a Lu Chinese Manufacturing Firms, Lancaster University Management School, om l.c Wooldridge, J.M (2005) Introductory Econometrics- A Mordern Approach, South n va Working Paper: No 003 y te re t 55 APPENDICES APPENDIX! ng Figure 5.2: Distribution of labor productivity (Labprf?ductivity) before transforming hi into logarithm form ep It) w ~ n lo ad 'V ~ I (") yi ~ ju y th II n ll fu m 2000 8000 6000 4000 oi va t n ua ~ al pl II C\1 ~ at nh Labor Productivity z z Table 5.9: Distribution of labor productivity (Labproductivity) before transforming ran'ge kurtosis skewness k p50 jm mean ht variable vb into logarithm form Labproductivityl 67.00986 27.33155 7635.275 18.42877 l.c gm + -541.6892 om an Lu n va ey t re th 56 Figure 5.3: Distribution of labor productivity in logarithm form (Lnlabproductivity) ' 0 F = 0.0000 R~squared = 0.7416 Adj R.:.squared = 0.7411 Root MSE = 60419 MS -+ -Model I 4865.16961 540.574401 w Residua1 I 1695 2634 4644 •365043809 n -+ -Total I 6560.43306 4653 1.40993618 lo ad coef y th Lnlabproductiviyl std Err t P>ltl Beta ~ -+ ju Lncap_intensity I 0942483 LnMLsca 1e I 7802366 Lnskill 0003653 olocation 0487457 r::sharell 1372517 r::share2 1855048 Dindustryi 1956656 oindustry2 I 6634135 Di ndustry3 I 1582862 _cons I -.0426519 yi pl 10.33 86.17 os 1.70 2.57 3.87 95 22.01 25 -0.57 n ua al I 0091263 0090543 0071799 0286496 053322 0479494 032902 0301468 0301268 0746989 n va 000 000 o 959 0.089 0.010 0.000 o 000 0.000 000 0.568 0982518 8618637 •0004294 0142135 0367228 0559181 0657126 2687804 0604 993 ll fu oi m Note: Regression with beta number converts variables' values into the same value so that their differences can be compared based on this value at nh z z ht vb k jm om l.c gm n a Lu n va y te re th 62