Thesis Public Defense | VNP26 - Nguyễn Quốc Việt

The spatial spillover effect on the institutional quality of 63 Vietnamese provinces from 2013 to 2020.

Student: Nguyễn Quốc Việt, VNP-26

Supervisor: Dr. Lê Văn Chơn

Abstract:

Institutional quality plays an essential role in the economy, helping to maintain stability and social justice to promote economic development. This study conducts an empirical analysis using the Spatial econometrics method with panel data spanning during the 2013-2020 period collected from the General Statistics Office (GSO), the Vietnam Chamber of Commerce and Industry (VCCI), and the Department of Survey, Mapping and Geographic Information Vietnam under Ministry of Natural Resources and Environment (2009). I use three models, Spatial Autoregressive Model (SAR), Spatial Durbin Model (SDM) and Spatial Error Model (SEM), to determine whether there exists a spillover effect of institutional quality across provinces and how it can be leveraged in policy-making. Although this effect has been studied in other countries, this is the first study on this issue in Vietnam. It is found that there is evidence of spatial spillover in provinces. Changes in a province’s neighbors might affect its institutional quality. It implies that the central government should create favorable  environments and stimulate an active learning spirit across provinces to promote faster spillover effects. In addition, province-level leaders should take into account new policies implemented by neighboring provinces.

JEL Classification: R12, D02

Keywords: spatial models, institutional quality, a spillover effect.