PUBLICATIONS & REPORTS

Contents Introduction

This paper examines the relationships between the growth of per capita GDP, on the one hand, and trade and multinational corporation (MNC) presence on the other, in a large number of Vietnam’s provinces for 1995-2003. Both descriptive statistics and regressions which assume no simultaneity among growth, trade, and MNC presence suggest that MNC presence is positively and significantly correlated with per capita growth. Moreover, the inclusion of MNC presence as explanatory variable suggests convergence of per capita growth among Vietnam’s provinces that is not observed when this variable is excluded. On the other hand, both descriptive statistics and these regressions indicated that correlations between trade or export ratios and per capita growth were weak and never significant statistically. Although remarkably consistent over a wide variety of possible specifications, these results must be treated with caution because attempts to deal with potential simultaneity among per capita growth, trade or export ratios, and MNC presence suggest no significant correlations among these variables and were not able to explain provincial growth very well. Numerous potentially severe measurement errors in the Vietnamese provincial data also mandate caution when interpreting the results.