Tam Bang Vu

Is foreign direct investment good for growth? Evidence from sectoral analysis of China and Vietnam

We estimate the impact of FDI on growth using sectoral data for FDI inflows to China and Vietnam. Previous empirical studies, using either cross-country growth regressions or firm-level micro-econometric analysis, fail to reach a consensus. Our paper is the first to use sectoral FDI inflow data to evaluate the sector-specific impact of FDI on growth. Our results show that, for the two developing-transition economies we examine, FDI has a statistically-significant positive effect on economic growth operating directly and through its interaction with labor. Intriguingly, we find the effects seem to be very different across economic sectors, with most of the beneficial impact concentrated in the secondary industries. Other sectors appear to see much less growth benefit from sector-specific FDI.

Foreign direct investment and endogenous growth in Vietnam

Foregin Direct Investments (FDIs) contribution to growth has been a controversial topic in economic literature and appears to be country specific. In this article, we use time-varying coefficients in an augmented production function and let FDI indirectly affect Gross domestic product growth through labour productivity. This approach creates built-in heteroskedasticity, so the feasible generalized least square estimation is employed. The results show that FDI has significant and positive effect on labour productivity and economic growth in Vietnam, but the effect is not equally distributed among economic sectors.

Natural disasters and firms in Vietnam

This paper investigates the consequences of natural disasters on firms in Vietnam over the period 2000 to 2008. We examine the impacts of natural disasters on firm investment and retail sales. We find evidence of adverse effects of disasters on retail sales accompanied by an increase in firm investment of very similar magnitude. There are important differences across geographical units, with the positive impact on investment unique to large cities and provinces with large urban concentrations. We find that more remote rural areas, especially in the North, experience declines in sales without the mitigating boost to investment in disasters’ aftermath. We also show that the decline in sales is not apparently associated with declines in household incomes.

Regional effects of natural disasters in China: investing in post-disaster recovery

We examine the effects of natural disasters on income and investment in China. Using macroeconomic province-level data and the provincial history of disaster exposure over the past two decades, we describe the relationship between disaster mortality and morbidity, disasters’ economic damages, government investment and regional economic activity, and infrastructure development. The Chinese government’s aggressive investment in post-disaster reconstruction is discussed, and the implications of this investment for post-disaster private sector economic activity are analyzed empirically. We further investigate the differential effects of natural disasters on economic activity in China’s diverse geographical regions.

An alternative approximation to consumer durables expenditures

Consumer durables expenditures are normally assumed to be of linear form with additive error term. Hansen and Singleton (1983) derive the log linear form for consumption, but they do not employ a depreciation rate. In this article, we use a multiplicative error term to obtain a log linear AR(1) with a unit root as an approximate process that drives durables expenditure. The Box–Cox test rejects the linear form in favour of the log linear one. The Box–Jenkins model selection procedure and the augmented Dickey–Fuller test support an AR(1) in log linear form.

The New Cooperative Medical System in China: A Cure for All?

This paper examines the effects of the New Cooperative Medical System in China. Data on village clinics, local hospitals, private medical expenditures, and government and social medical expenditures are collected from the National Bureau of Statistics of China. Preliminary tests are performed on multicolinearity, endogeneity, omitted variables and also reveal both heteroskedasticity and autocorrelation problems. The Newey-West estimations are used to obtain corrected standard errors for coefficient estimates. The results show that the new cooperative medical system appears to help households reduce medical expenditures and decrease numbers of deaths; it also seems to reduce the numbers of pharmacists and physicians in local hospitals, redirecting these pharmacists and physicians to village clinics.

The interaction of tourism and cyclone activity In East Asia: Sustainability and disasters

This research investigated the relationship between cyclone activity and tourism in the Northeast Asian and Southeast Asian regions. A dataset on the damage impact of cyclones was constructed based on the Tropical Cyclone Best Track tables and the Annual Tropical Cyclone Reports provided by the United States National Climatic Data Center for the period 1995–2014. A damage index was based on the wind speed when each cyclone went through a region and the distance of the region to the largest city in the vicinity. The results showed that there were feedback effects between these cyclones and unsustainable tourism where cyclone damage reduced the number of tourist arrivals and some unsustainable activities by the tourism industry increased the cyclone damage. We then examined the disparities among the affected countries in East Asia. The results showed that that except for Philippines, which endured much more cyclone damage than that aggregate level, the other countries were either at or below the average level of damage.

Capital Estimation: Theory and US-Japan Comparative Study

Abstract: Capital stock estimation is a thorny task to deal with. To circumvent the problem, we derive a function which does not contain capital stock, yet whose regression indirectly estimates the production function. Consequently, the estimated production function can generate the capital stocks and depreciation rates. The approach applied to US data resulted in estimates of both production function and capital stock very close to those differently estimated in existing literature. Japan data are then applied as a comparative study.