statistics for business reportation subject statistics for business

Purpose of the reportOver the past four decades, Vietnam has undergone a remarkable economic transformation fueled, in significant part, by its strategic approach to attracting Foreign D

TRƯỜNG ĐẠI HỌC QUỐC TẾ

ĐẠI HỌC QUỐC GIA THÀNH PHỐ HỒ CHÍ MINH

-STATISTICS FOR BUSINESS

REPORTATION

Subject: Statistics for Business

Student name:

Phạm Nguyễn Lan Oanh – FAACIU22056

Trần Bùi Khánh Nhi – FAACIU22049

Vũ Phương Thảo – FAACIU22060

Trần Thành Hiệp – FAFBIU22238

Nguyễn Thanh Trúc- FAFBIU22261

Lương Tấn Châu Nguyên – BABAUH22063

Instructor: Mr Nguyen Ba Trung

Wednesday, January 17th, 2024

TABLE OF CONTENT

Introduction 3

Purpose of the report 3

Overview of the global FDI inflows over the past few decades 3

10 selected countries with some information about FDI inflows .4

Key findings description 4

Empirical findings 4

Descriptive analysis 4

Inferential statistics 8

Conclusion 15

I Introduction

1 Purpose of the report

Over the past four decades, Vietnam has undergone a remarkable economic transformation fueled, in significant part, by its strategic approach to attracting Foreign Direct Investment (FDI) This report embarks on a comprehensive journey, spanning from the inception of Vietnam's FDI endeavors in 1988 to the current landscape The analysis delves into critical phases, examining FDI as a percentage of GDP, its impact on the Balance of Payments, and the net inflow, providing an intricate exploration of Vietnam's economic trajectory From initial challenges stemming from an unstable economy to overcoming global financial crises and the recent disruptions caused by the COVID-19 pandemic, Vietnam's FDI landscape stands as a testament to its resilience The report not only unveils key findings but also proposes strategic recommendations to fortify Vietnam's competitive position in the dynamic global economy, offering a nuanced understanding of the nation's journey in the realm of foreign investment

In this thorough examination, we explore the complicated relationship that connects significant economic indicators and foreign direct investment (FDI) Analyzing variables including GDP growth, GDP per capita, GDP deflator, trade dynamics, and population total, we demonstrate the complex relationships impacting the decisions made by foreign investors Everything from the attraction of large markets and a wide range of labor population to the influence of trade policies, economic stability, and technology transfer, each aspect offers essential data about what draws foreign direct investment

2 Overview of the global FDI inflows over the past few decades

Over the past few decades, global Foreign Direct Investment (FDI) inflows have undergone a transformative journey, reflecting the evolving dynamics of the world economy The late 20th century witnessed a surge in FDI as nations embraced economic liberalization, trade openness, and rapid technological advancements The 1990s marked a significant period of cross-border investments, fostering heightened economic interdependence However, the early 21st century brought complexities with economic uncertainties and financial crises, challenging the trajectory of FDI Despite these hurdles, the 2010s saw a resurgence in FDI, characterized by a shift in investment patterns towards

emerging markets and an increasing emphasis on environmental, social, and governance (ESG) considerations As we navigate the current decade, FDI continues to be a dynamic force, shaped by geopolitical shifts, technological innovation, and a growing commitment

to sustainable development, playing a pivotal role in shaping the contours of the global economy

3 Ten selected countries with some information about FDI inflows.

Conduct a thorough investigation into Foreign Direct Investment (FDI) across ten distinct countries — Vietnam, Argentina, Brazil, China, Greece, Hungary, Indonesia, Malaysia, Thailand, and Ukraine Explore the distinct economic policies and contexts of each country to obtain valuable knowledge about the primary trends that shape foreign investment in these variable contexts This paper provides an in-depth understanding about those nations' contribution to the big picture of the world economy

4 Key findings description

The nexus between the inflow of foreign direct investment (FDI) and a nation's political, economic, and educational dimensions is intricate and interwoven Analyzing the factors that wield substantial influence on FDI is imperative for both economic development and the fortification of international relationships

This study seeks to ascertain the impact of key indicators, namely the current account balance (% of GDP), GDP deflator (varied base year by country), GDP growth (annual

%), trade (% of GDP), and total population, on a country's foreign direct investment By using some statistical tools and the regression model, we aim to quantify the profound influence of each factor on FDI

In the assessment of global foreign direct investment and Vietnam's position therein, a selection of ten countries—Argentina, Brazil, China, Greece, Malaysia, Indonesia, Hungary, Vietnam, Ukraine, and Thailand—has been made Despite the considerable fluctuations in the FDI of these nations, an overarching classification into three categories, namely High (%FDI flow per year: China, Brazil, Argentina), Middle (Hungary, Malaysia, Indonesia, Thailand), and Low (Greece, Ukraine, Vietnam), will be made to elucidate the broad patterns and trends in global FDI distribution

II Empirical findings

1 Descriptive analysis

To begin with, Vietnam has been in the process of attracting FDI since 1988; it has begun to be effective and contribute significantly to the economy That is to say, the foreign direct investment in Vietnam was about 4.8% of GDP during 1992 This was two times lower than

Malaysia has successfully changed the law to "Investment Promotion Law" to attract FDI and accept foreign-invested projects to export more products, selling more goods for domestic industrial parks Nevertheless, VietNam ranked in second position, overtaking the percentage of GDP of FDI from other countries Specifically, this data was tenth as high as the ones for Ukraine The underlying cause was an unstable economy, characterized by a high rate of inflation, corruption, monopolies, weak property rights, and inefficient public services

Regarding the remaining demographics, the amount of BoP, the current US$ in FDI in Viet Nam, was in the opposite position during this period, at about 473.945.856 USD, constituting nearly the lowest position within the ten nations engaged in FDI, net inflow However, FDI capital flows continue to grow and flow strongly, contributing positively to the Vietnamese economy near the end of the period

In the following 10 years, the economy has witnessed a dramatic trend in FDI (net inflow) However, the position in the percentage of GDP

in FDI in Vietnam was the same as the one in 1992 The percentage of GDP

in FDI in Malaysia, VietNam, China, and Thai Land appeared to decrease gradually In contrast, the percentage of GDP in the other six nations had a tendency to climb remarkably, especially in Hungary which dominated the market

The main reason is that, due to the impact of the Asian financial and monetary crisis in

1997, the Asian economy faced difficulties in export markets, and FDI capital flows from other countries in the region also suffered significantly As a result, this phenomenon

made the investment environment, particularly in Vietnam, lose its attractiveness

In contrast, the data of Hungary experienced an upward trend, accounting for 5.5% of GDP compared to Vietnam's 4% This is due to the alteration in strategic assets, efficiency market, and resource-seeking motives including reducing costs of serving a local market through operating from a local facility, and quickly adapting its products Although the data for Vietnam decreased remarkably, it still gained a competitive position, accounting for more than 40-fold of Greece due to its unstable political and economic regimes in Greece As a result, it might have made its volume of FDI outside South Eastern Europe unable to make any impact and attract the attention of economists and the academic community during this period

In terms of the BoP's current US, Vietnam’s position increased from ninth to seventh in comparison to other nations, in particular, surpassing Indonesia and Greece, two countries with an amount of BoP of approximately 2000 million ten years ago Besides, China has remained in the highest position since 1992 Despite suffering from the financial crisis, FDI in China is mainly dependent on the available investment capital as well as the sheer size of China’s population and a strong workforce, making it an attractive nation for investors to commit capital to higher-end industries

Regarding the third

decade, from 2002

to 2012, the FDI

flows fluctuated

consistently In

other words, the

period 2006–2010

marked a period of

prosperity for FDI

capital flows; this

was the period when

Vietnam entered the

WTO playground

However, during 2012, the FDI capital decreased greatly in the context of the global economy falling into an economic recession and fierce competition amongst Southeast Asian nations, at around 4.3% of GDP and 8,368,000,000 USD As a result, the position

of FDI in the percentage of FDI and BOP, currently US$ in Vietnam, was in a poorer position compared to the previous decade generally

According to the FDI flow chart, Vietnam is ranked in third position from 2002 to 2012 Vietnam's foreign direct investment (FDI) flow has increased from 4% to 4,3% during the past ten years, but Hungary continues to be at the top of the chart with noticeable increases from 5,5% to 8,5% Even though Greece has improved, there is still a large gap between Greece and other countries, which makes Greece remain in the last place with its 0,8% FDI flow

In the period from 2012 to the present, despite difficulties stemming from the internal instability of the Vietnamese economy, especially the economic recession caused by the COVID-19 pandemic, in general, the proposed FDI attraction plan has been achieved That is to say, the percentage of GDP stood at the second position, at 4.37%, and the BoP's current US$ also achieved a higher position, from seventh to fourth In

other words, during the

period affected by the

epidemic, Vietnam has

surpassed European

countries in the chart

such as Argentina or

Hungary to get back to

the second position in

terms of GDP percentage,

especially Hungary,

which has been imposing

at the top percentage of both GDP and BoP for more than a decade from 1995 to 2012 The drastic decline in Hungary's FDI inflow can be attributed to the effect of the

2009-2010 world financial crisis, the challenges posed by foreign investment laws, and also the poor variety of the labor force in Hungary compared to other countries at that time

Moreover, Brazil surpassed Vietnam, achieving the highest place in the percentage of GDP due to its advantages as a domestic market exceeding 210 million people, abundant exploitable raw materials, a resilient diversified economy, and a strategic geographic location facilitating access to neighboring South American nations At the same time, China remained in the highest position in the amount of current US dollars over the period given

In general, over the past four decades, although Vietnam has encountered an economic recession, which reduced business and investment confidence and strongly impacted the economy and global FDI, Vietnam still holds a competitive position in the percentage of GDP and BoP, current US$ in foreign direct investment, and net inflow

2 Compute descriptive statistics

\Documents\Data of reportation.xlsx

3 Inferential statistics

Regression model data

\Documents\regression model.xlsx

Total Population affect FDI

1 Market Size and Demand:

-Large market: Larger population -> larger market Attract companies due to the larger potential for their products or services -> Investors see the opportunities -> Drive the FDI up

-Economies of scale: Larger population lead to economies of scale, make it more cost effective for companies to sell and produce the products -> Attract the investors that seeking for the cost efficiency and advantages problems

2 Labor Force:

-Skilled labor: Larger population -> Diversification in skilled labor -> Investors might be attracted to the companies where they can find the necessary expetise for operations -Low-Cost labor: Lrger population countries offer a low cost labor force -> Attractive for investors want to reduce production cost

3 Market Diversity:

Diverse Consumer Base: A large and diverse population can provide a variety of consumer preferences and needs Investors may find opportunities in catering to different segments

of the market

4 Infrastructure and Resource:

-Infrastructure: Larger population size -> Increased infrastructure development to support need of society growing -> Appealing to the investors require reliable infrastructure -Resources: Population can also be correlated with ability of natural resources -> Attractive to investors in certain industries

5 Political and Regulatory Environment:

-Government Policies: The impact of population size on FDI is also influenced by government policies and regulations A stable political environment, clear regulations, and favorable policies can encourage foreign investors, regardless of population size

6 Consumer Bahavior and Trend:

-Understanding consumer behavior, market trend is very important to investors Large population can indicate a diverse set of consumer behavior and market trend that can be leveraged by foreign companies

Trade (%) affect the FDI

1 Market Access:

-Open Markets: Countries with open and liberalized trade policies may attract more foreign direct investment When a country makes its markets more accessible to foreign investors through trade agreements and lowered trade barriers, it becomes more enticing to them

-Tariff reduction: Lowering tariffs and other trade barriers can boost FDI by making it more cost-effective for foreign enterprises to export to the host country

2 Global Value Chains:

-Integration into Global Value Chains (GVCs): Foreign direct investment is frequently linked to global manufacturing networks and supply chains Countries that are connected into global value chains and play an important role in international trade may attract greater FDI as businesses strive to establish a presence in crucial areas along these chains

3 Market Size and Export Opportunities: