A Spatial Regression Approach to Analysis of Geographic Spillover Effects on Growth in Provinces in Vietnam 2000–2018

Abstract

This paper aims to study the spatial spillover effect on economic convergence among provinces in Vietnam. The estimation results by the OLS method show that the estimated estimator is ineffective statistical inferences are not reliable because of the phenomenon of spatial error autocorrelation. Meanwhile, the spatial regression approach gives very reliable results. Moreover, the spatial regression specification shows the positive effect of spatial spillover on the convergence rate, and the average growth rate of a region is positively affected by the growth of neighborhood regions. Based on empirical evidence, the article proposes many important policy implications to help localities have a long-term vision in making appropriate policies to promote regional economic growth in Vietnam.