(LUẬN văn THẠC sĩ) the impacts of institutional implementation on provincial economic performance, the case of vietnam (2007 2011)

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS THE IMPACTS OF INSTITUTIONAL FACTORS ON PROVINCIAL ECONOMIC PERFORMANCE: THE CASE OF VIETNAM (2007-2011) By PHAN THACH TRUC MASTER OF ARTS IN DEVELOPMENT ECONOMICS Ho Chi Minh City, December, 2013 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS THE IMPACTS OF INSTITUTIONAL FACTORS ON PROVINCIAL ECONOMIC PERFORMANCE: THE CASE OF VIETNAM (2007-2011) A thesis submitted in partial fulfillment of the requirements for the degree of Master of Arts in Development Economics By PHAN THACH TRUC Academic supervisor Dr TRUONG DANG THUY Ho Chi Minh City, December, 2013 TIEU LUAN MOI download : skknchat@gmail.com DECLARATION I declare that: "The impacts of institutional factors on provincial economic performance: The case of Vietnam (2007-2011)" is my own work; it has not been submitted to any degree at other universities I confirm that I have made all possible effort and applied all knowledge for finishing this thesis to the best of my ability Ho Chi Minh City, December 2013 PHAN THACH TRUC i TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENTS First and foremost I would like to extend my gratitude to my supervisor, Dr Truong Dang Thuy, for invaluable comments, guidance and engagement through the learning process of the thesis I am much obliged to Dr Pham Khanh Nam for introducing me to the topic as well as for the availability of the dataset In addition, I am thankful for Le Duc Anh for all your kind help during my time in class 17 Then I feel lucky to have time doing the thesis with Nguyen Thi Ngoc Linh and Nguyen Quang, from whom I have a lot of things to learn Lastly and obviously, I am deeply indebted to my family members for all the kind understanding and spiritual support Forever, I will be wholeheartedly grateful for your love ii TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT Given the intensive PCI score race among Vietnamese provinces in the past year so as to improve the enabling environment for local economic development, this study is to justify the imperativeness of such a race Employing the PCI and its nine sub-indices as proxies for institutional quality, we explore the institutional impacts on GDP for the dataset of 58 Vietnamese provinces from 2007 to 2011 In realizing this objective, we make an attempt to incorporate into the estimation models of both Cobb-Douglas and Translog functional form the de facto overstatement of provincial GDP While the positive impacts of PCI on provincial GDP are statistically confirmed, the regression results obtained for the nine sub-indices are divergent across functional forms and outlier treatment approaches To the extent that the economic significance of different institutional factors is assessed, our research objective is realized and respective policy implications are then suggested Key words: PCI, GDP overstatement, institution, Cobb-Douglas, Translog iii TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENT ii ABSTRACT iii TABLE OF CONTENTS iv Chapter INTRODUCTION 1.1 Problem statement 1.2 Research objective and research questions 1.3 Contribution of the study 1.4 Organization of the study Chapter LITERATURE REVIEW 2.1 Theoretical literature: The New Institutional Economics 2.1.1 A renewed interest – some distinct features 2.1.2 Institutions matter for economic performance 2.2 2.1.2.1 Theoretical approaches 2.1.2.2 Mechanism and channels of influence Theoretical model: the aggregate production functions 11 2.2.1 History of the production functions 11 2.2.2 Properties of the production function 14 2.3 Empirical literature 15 Chapter DATA AND RESEARCH METHODOLOGY 19 3.1 Data and variable measurement 19 iv TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) 3.1.1 Data collection 19 3.1.2 Variable measurement 21 3.1.2.1 Response variable 21 3.1.2.2 Explanatory variables 21 3.1.3 3.2 Descriptive statistics 29 Research methodology 33 3.2.1 Model specifications 33 3.2.2 Estimation methods 35 3.2.2.1 Data cleaning – OLS regression for panel data 35 3.2.2.2 Modeling the overstatement of growth data – The Stochastic Frontier Analysis (SFA) 37 3.2.3 Model validation 41 3.2.3.1 Testing the model overall significance 41 3.2.3.2 Statistical test of individual coefficient significance 41 3.2.4 Analytical framework 42 Chapter EMPIRICAL RESULTS AND DISCUSSION 43 4.1 Overall explanation and hypothesis testing 43 4.1.1 Overall explanation of model regression 43 4.1.2 Hypothesis testing 44 4.1.2.1 Statistical test of model overall significance 44 4.1.2.2 Statistical test of individual significance of institution variables 45 4.2 Model estimation – Institutional impacts on GDP 46 4.2.1 Transaction cost institution: Entry cost, Time cost and Informal charges 46 4.2.2 Property right and Contract enforcement institution: Access to Land and Legal Institution 53 v TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) 4.2.3 Information problem institution: Access to information, Private sector development and Pro-activity of provincial leaders 56 4.2.4 Labor policy and training 62 4.2.5 The PCI 64 Chapter CONCLUSION AND PERTAINING ISSUES 70 5.1 Conclusion 67 5.2 Policy implications 68 5.3 Limitations and further studies 69 REFEERENCES 70 APPENDIX 74 vi TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) Sato, K (1967) A Two-Level Constant-Elasticity-of-Substitution Production Function Review of Economic Studies, 43, 201-218 Schmitz, H., Dau, A.T., Pham, T.H., & McCulloch, N (2012) IDS Research Report 76: Who drives economic reform in Vietnam’s provinces? Institute of Development Studies Brighton UK Schumpeter, J.A (1954) History of Economic Analysis Allen & Unwin, London Shirley, M.M (2008) Institutions and Development Edward Elgar Publishing Limited, Cheltenham and Northampton Siddiqui, D.A., & Ahmed, Q.M (2012) The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation Structural Change and Economic Dynamics, 24, 18-33 Smith, A (1976), An Inquiry into the Nature and Causes of the Wealth of Nations, edited by R H Campbell et al, Oxford: Oxford University Press Sobel, R.S (2008) Tesing Baumol: Institutional quality and the productivity of entrepreneuship Journal of Business Venturing, 23, 641–655 Stigler, G.J (1952) The Ricardian Theory of Value and Distribution, Journal of Political Economy, 60, 187-207 Stiglitz, J.E (1985) Economics of information and the theory of economic development Revista De Econometria, (1), 5-32 Tebaldi, E.& Elmslie, B (2008) Institutions, innovation and economic growth Journal of Economic Development 33 (2), 1-27 Tenev, S., Carlier, A., Chaudry, O., & Nguyen, Q.T (2003) Informality and the Playing Field in Vietnam’s Business Sector, Washington, DC: IFC Tran, T.B., Grafton, R.Q., & Kompas, T (2009) Institutions matter: The case of Vietnam The Journal of Socio-Economics, 38, 1-12 Uzawa, H (1962) Production Functions with Constant Elasticities of Substitution, Review of Studies, 29, 291-299 Velupillai, K (1973) The Cobb-Douglas or the Wicksell Function? – A Comment Economy and History, Von Neumann, J (1937) A model of general economic equilibrium, Review of Economic Studies, 13 (1945–1946), 1-9 Wallis, J J., & North, D.C (1986) Measuring the transaction sector in the American Economy In S L Engerman and R E Gallman (eds)., Long-Term Factors in American Economic Growth Chicago: Chicago University Press Wicksell, K (1923) Real Capital and Interest: Review of Gustaf Akerman’s Realkapital und Kapitalzins In Robbins, L (1934) ed., Lectures on Political Economy,Vol 1: General Theory Routledge & Kegan Paul, London Wicksteed, P.H (1894) An Essay on the Co-ordination of the Laws of Distribution, Macmillan & Co., London Williamson, Oliver E (1985) The Economic Institutions of Capitalism New York: The Free Press-Macmillan Wolf , C (1955) Institutions and economic development, American Economic Review, 45 (5), 867883 World Bank (2002), World Development Report 2002: Building Institutions for Markets, Washington, D.C.: World Bank 73 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) APPENDIX Table A1.Hausman Test Cobb-Douglas chi2(5) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 62.17 Prob>chi2 = 0.0000 Test: Ho: different in coefficents not systematic Variables Capital Labor PCI t dum2009*PCI (b) fix 0.1325534 -0.1756601 0.151948 0.1084627 -0.0093779 (B) random 0.089342 0.4832555 0.158888 0.0975553 -0.0098304 Coefficients (b-B) Difference 0.0432114 -0.6589157 -0.00694 0.0109074 0.0004525 sqrt(diag(V_b-V_B)) S.E 0.0834597 Note: All variables (except dummy2009 and t) are in log form Table A.2.HausmanTest Translog chi2(14) = (b-B)'[(V_b-V_B)^(-1)](b-B) = -103.95 chi2 model fitted on these data fails to meet the asymtotic assumptions of the Hausman test Variables Coefficients (b-B) fix random Difference Capital 2.433293 3.170877 -0.73758 Labor 2.350803 4.799431 -2.44863 PCI 0.250484 -1.33629 1.586776 t 0.858285 0.684084 0.174201 Capital*Capital -0.03824 -0.0563 0.018066 Labor*Labor -0.10453 -0.22648 0.121945 PCI*PCI 0.15079 0.345815 -0.19503 t*t 0.015111 0.014893 0.000217 Capital*Labor -0.05178 -0.07078 0.018996 Capital*PCI -0.08115 -0.08459 0.003435 Capital *t -0.03612 -0.02819 -0.00792 Labor*PCI 0.008543 0.028154 -0.01961 Labor*t -0.02076 -0.00843 -0.01234 PCI*t -0.02708 -0.04097 0.013888 dum2009*PCI -0.0004 -0.00033 -7.5E-05 Note: All variables (except dummy2009 and t) are in log form (b) (B) sqrt(diag(V_b-V_B)) S.E 0.6123082 0.0389488 74 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) Table A.3 Outlier I detection (a) Outlier I - Dien Bien (b) Outlier I - Hai Duong (d) Outlier I - Hoa Binh (c) Outlier I - Phu Tho 75 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) Table A.4 Outlier II detection 2007 2008 2009 2010 2011 76 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) Table A.5 Summary of empirical studies No Author (s) and study Data set Methodology Dias & Tebaldi (2012)Institutions, human capital, and growth: The institutional mechanism -Panel data 61 countries (1965-2005) - Formal growth model -GMM dynamic Siddiqui & Ahmed (2013) The Effect of Institutions on Economic Growth: A Global Analysis Based on GMM Dynamic Panel Estimation Panel of 84 countries 2002-2006 - Formal extended growth model -GMM - based Arellano-Bond linear dynamic Atul and Sal (2012) On the relation between regulation and economic growth Gagliardi (2008) Institutions and economic change: A critical survey of the new institution approaches andl evidence Panel 23 OCD Countries (2002-2008) Theoretical approaches and empirical evidences on the subject Proxy variable -Political institution: Polity-IV measure of democracy and autocracy -Structural institution: share of educated labor in the economy (steady state condition) Index of Institutionalized Social Technologies (sub-indices: institutional and political rents, policy rents and riskreducing technologies) -Solow’s growth model -Fixed and Random effect Governance indicators from World Bank Meta analysis -Historical perspective approach -Institutional comparative approach -Imperfect information theory Key findings The importance of interactions between institution and human capital accumulation is highlighted Policy implication: the growth path is tied to structural institutions, not political ones Good institutions favor economic growth For a developing country, institutional and political rent index is more important than the other two factors Higher quality of regulation leads to higher growth Institutional framework substantially influences economic outcomes 79 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance 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the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) Sobel (2008) Testing Baumol: Institutional quality and the productivity of entrepreneuship Hasan et al (2007) Institutional development, financial deepening and economic growth: evidence from China OLS Institutional quality scores: economic freedom index Good institutions channel resources to productive entrepreneurship, thus leading to higher economic growth Panel China’s 31 provinces, 1986-2002 -Barro’s (1991) growth equation - OLS -System GMM (annual and three year average) -Size of private sector: private sector total fixed investment/ overall fixed investment -Rule of law: number of lawyers/10,000 people - Awareness of property rights: number of domestic trademark applications/ number of firms Institutional development plays an important role in economic development Jalilian, Kirkpatrick & Parker, (2007) The impact of regulation on economic growth in developing countries: A cross-country analysis - 117 countries 1989 – 1999 - 96 countries 1980- 2000 - Cross-section regression - Panel regression (fixed effects) Two regulatory indicators: RQ (regulatory quality) and GE (government effectiveness) A strong causal link exists for the institution – growth nexus in developing countries Tran et al.(2009) Institutions matter: The case of Vietnam PCI 2006 Firm-level data 2005 OLS PCI: proxy for institutional quality Local governance quality is an essential factor explaining differences in firm’s economic performance Glaeser et al (2004) Do institutions cause growth? Cross-country 1960-2000 OLS regression with country fixed effects Executive constraints, Democracy, Autocracy-polity IV, Expropriation risk, Autocracy-Alvarez, Government effectiveness It is challenging to establish a causal link between institutions and economic growth due to problems in institutional measurements and limitations in econometric techniques Cross-section 48 USA’s states 80 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011) Jenny Minier (2007) Institutions and parameter 10 heterogeneity -OLS Executive constraint variable (Jaggers Investigate the indirect effects of 70 countries Panel data Endogenous and Marshall , 2000) institution on growth allowing for (1960-2000) sample splitting parameter heterogeneity Evidence shows technique that institutions influence the marginal effect of policy variables on growth 81 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance the.case.of.vietnam.(2007.2011)(LUAN.van.THAC.si).the.impacts.of.institutional.implementation.on.provincial.economic.performance 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