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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 36, No. 3, pp.325-355
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2023
Received 20 Mar 2023 Revised 19 Apr 2023 Accepted 08 May 2023
DOI: https://doi.org/10.22904/sje.2023.36.3.004

Can the Vietnamese Provincial Competitiveness Index Attract Enterprises for Locals?

Nhan Thanh Trinh ; Seongwoo Lee
Nhan Thanh Trinh, PhD student, Department of Agricultural Economics and Rural Development, Seoul National University, South Korea. Lecturer at Soc Trang Community College, Vietnam trinhthanhnhan@snu.ac.kr
Seongwoo Lee, Professor, Research Institute of Agriculture and Life Sciences, Department of Agricultural Economics and Rural Development, Seoul National University, South Korea seonglee@snu.ac.kr

JEL Classification: R10; R15

Abstract

The Vietnamese provincial competitiveness index (PCI) is a tool designed to assess the economic governance quality of provincial authorities in creating a favorable business environment for enterprises. This study employs descriptive statistical analysis and structural equation modeling to examine the effectiveness of PCI in attracting enterprises. We utilize two official data sources in Vietnam, namely, the PCI and proxies of enterprise attraction, including the number of enterprises, employees, and capital value of enterprises, covering the period from 2013 to 2020. Our results show a strong correlation between the PCI and its subindices and a positive impact of the PCI on all proxies of enterprise attraction. Specifically, the effect of the PCI on the number of enterprises is more potent than on the number of employees and the capital value of enterprises. In addition, our study finds that the effect of the PCI on enterprise attraction in less developed provinces is more vital than in developed provinces.

Keywords:

Competitiveness, Enterprise Attraction, PCI, Vietnam

Acknowledgments

This paper is a part of PhD thesis at Seoul National University. The first author is a Global Korea Scholarship scholar sponsored by Korean Government. We are grateful for the editors and anonymous reviewers for the valuable comments on the earlier version.

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