Spatial effects of foreign direct investment on wage inequality in Vietnam

Figures & data

Table 1. List of variables, measures, and data sources

Variables	Symbol	Measure	Source
Wage inequality	WI	the average wages of skilled laborers compared with the average wages of unskilled laborers in each province	General Statistics Office of Vietnam
Foreign direct investment	FDI	FDI of each province (% GDP)	General Statistics Office of Vietnam
GDP	PGDP	GDP per capita of each province	General Statistics Office of Vietnam
Trade openess	TRADE	Export + Import of each province (% GDP)	General Statistics Office of Vietnam
Human capital	HC	the proportion of trained labor force in each province	General Statistics Office of Vietnam
Skills scarcity	RSS	the unemployment rate of skilled and unskilled laborers compared in each province	General Statistics Office of Vietnam
Cost of labor training	TS	the percentage of total business expenses for labor training in enterprises for each province	General Statistics Office of Vietnam

Table 2. Descriptive statistics

No	Variables	Observation	Mean	Std. Dev	Min	Max
1	WI	567	1.777611	0.670248	0.670425	6.87166
2	FDI	567	5.111963	11.01735	0	124.5034
3	PGDP	567	3.28926	0.5202286	2.37931	5.488951
4	HC	567	16.35397	6.974318	5.1	46.7
5	TRADE	567	104.9125	268.9078	0.0255907	4.053,993
6	RSS	567	0.1657138	0.0892709	0.0368543	0.5086727
7	TS	567	5,43153	1,076699	1,1995796	7,99

Table 3. The BIC and AIC results of the models

SDM Model		SAC Model		SAR Model		GSPRE Model
AIC	BIC	AIC	BIC	AIC	BIC	AIC	BIC
815.4993	876.2643	808.0026	847.0659	812.4264	847.1493	983.0543	1030.798

Table 4. Estimation results of fixed-effects regression

	(1)
Variables	FE
FDI	0.0101***
	(0.003)
PGDP	−0.2052
	(0.241)
HC	−0.0245*
	(0.013)
RSS	−2.5593***
	(0.440)
TC	0.0913***
	(0.026)
TRADE	−0.0001
	(0.000)
Constant	1.9412***
	(0.669)
Observations	567
R-squared	0.159
Number of id	63

Standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.

Table 5. Estimation results of SAC with spatial fixed-effects

	(1)	(2)	(3)	(4)
Variables	Main	LR_Direct	LR_Indirect	LR_Total
FDI	0.0083 ***	0.0092 ***	0.0101 **	0.0193 ***
	(0.003)	(0.003)	(0.004)	(0.007)
PGDP	−0.3442 *	−0.3860 *	−0.4308	−0.8168 *
	(0.181)	(0.204)	(0.271)	(0.463)
HC	−0.0186 *	−0.0210 *	−0.0231	−0.0442 *
	(0.010)	(0.011)	(0.014)	(0.025)
RSS	−1.6957 ***	−1.9038 ***	−2.0769 ***	−3.9807 ***
	(0.362)	(0.381)	(0.587)	(0.859)
TC	0.0558 ***	0.0629 ***	0.0685 **	0.1315 ***
	(0.019)	(0.021)	(0.027)	(0.046)
TRADE	−0.0001	−0.0001	−0.0001	−0.0002
	(0.000)	(0.000)	(0.000)	(0.000)
Spatial
Rho	0.5666 ***
	(0.068)
Lambda	−0.3568 ***
	(0.115)
Variance
sigma2_e	0.2337 ***
	(0.015)
Observations	567	567	567	567
R-squared	0.156	0.155	0.154	0.154
Number of id	63	63	63	63

Standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.