EMERGE Research Seminar, Wednesday 22 May at 12:15 in RHG/01
Tue, 28 May 2013 17:43:00 BST
Roberto Ercole, a first year PGR at the University of Huddersfield, presented his research titled ‘The Geographic agglomeration and Colocalization of Two-Digits Manufacturing in Vietnam Using Discrete-Space Models’ to the Emerging Markets Research Group on 22 June 2013. The presentation was based on recent research work conducted by Roberto, who investigated the economic agglomeration inequalities and the colocalization of two-digit manufacturing industries in Vietnam in 2010 using a-spatial statistics.
Vietnam is one of the most dynamic emerging countries in South-East Asia, and has witnessed a rapid economic growth in the last twenty years. The Vietnamese’s GDP constantly grew with an average of 7% between 2000 and 2012. The number of total enterprises grew more than 150% between 2005 and 2010. The inward FDI largely grew more than 200% between 2005 and 2010, of which more than 85% within the manufacturing industry. Despite these favourable economic conditions, there is little academic attention to the Vietnamese economic geography. Thus, the research was addressed to fulfil this empirical gap. Initial findings of Roberto’s research indicate that Vietnam is characterized by significant provincial inequalities in terms of economic activities, employment, value added and FDI. Within this framework, Hanoi and Ho Chi Minh played a predominant role in the Vietnamese economy as they were capable of attracting a large part of the country’s economic activities. Additionally, the polarization of inhabitants towards few favourable locations strengthened the socio-economic imbalance among Vietnamese provinces. In contrast, the vigorous development of Ho Chi Minh fostered the economic growth of its surrounding locations such as Dong Nai and Binh Duong. This positive autocorrelation inevitably favoured regional integration in the South East region. Furthermore, the findings reveal that labour-intensive industries have had a high number of establishments and concentration of employment at the plant level in Vietnam in 2010. This is mainly due to the country’s competitive advantage in aspects such as low labour cost and abundant workforce, though these industries showed a low propensity to cluster. In contrast, resource dependent industries had high colocalization coefficient in Vietnam in 2010 though with low number of establishments within the country.
In recent years, Vietnam has witnessed important transformations in terms of economic openness, which fostered the foreign direct investments and its overall economic growth. This inevitably affected the economic distribution within Vietnamese locations generating core-periphery configurations. Despite this idiosyncratic development there is little academic attention for the Vietnamese economic geography. Therefore, this research aimed to contribute academically to explore the distribution of economic activities in Vietnam with particular reference to the provincial inequalities and the colocalization of two-digit manufacturing industries. This research has two main implications with reference to firms’ localization decisions and policy makers. Firms choose a location based on profit maximisation given by the trade-off between economy of scale and transportation costs. Based on this, they have to decide whether to localize their activities in an economic dense site or in the periphery. Therefore, in order to facilitate firms’ localization decisions, it is paramount to unfold the economic and industrial inequality across Vietnamese locations. In addition, policy makers are influenced by the economic imbalance and disproportional industrial concentration as they are sensitive to develop policies for a more homogeneous country’s growth and sustainable development of dense locations. In particular, Vietnamese government local and international organizations are committed to implement policies in order to reduce the country’s economic inequality though high economic asymmetry, which was quite evident in 2010 as the research showed.
