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Local economic growth model and application to Binh Dinh province - 1


COMMITMENT


I hereby declare that this is my own research work. The results presented in the thesis are true. References are clearly cited.


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Thesis author


Local economic growth model and application to Binh Dinh province - 1

Nguyen Duy Thuc



SIDE COVER

INDEX


Page

COMMITMENT 2

TABLE OF CONTENTS 3

LIST OF ABBREVIATIONS 4

LIST OF TABLES AND FIGURES 5

INTRODUCTION 9

Chapter 1. METHODOLOGICAL BASIS 15

1.1. General theory of economic growth 15

1.2. Some economic growth models 33

1.3. Building a theoretical model applicable to the provincial level 58

Chapter 2. ANALYSIS OF THE ECONOMIC GROWTH PROCESS OF BINH DINH PROVINCE IN THE PERIOD 1990-2005 68

2.1. Factors affecting economic growth of Binh Dinh province 68

2.2. Current status of economic growth and growth quality of Binh Dinh province 74

2.3. Systemic approach in analyzing economic growth in Binh Dinh province 93

2.4. Evaluation of some factors reflecting the quality of economic growth in Binh Dinh province in the period 1990 - 2005 104

2.5. General assessment 115

Chapter 3. LOCAL ECONOMIC GROWTH MODEL 118

3.1. Objectives and scope of application of model 118

3.2. Estimated results 119

3.3. Model for building local economic development plans 141

3.4. Simulations 156

CONCLUSION AND RECOMMENDATIONS 164

SOME WORKS OF THE AUTHOR RELATED TO THE THESIS 171

LIST OF REFERENCES 172


LIST OF ABBREVIATIONS


APEC Asia-Pacific Economic Cooperation, Asia-Pacific Economic Cooperation Forum.

CPI Consumer Price Index, Consumer Price Index EX Export, Export

GDP Gross Domestic Product, Gross National Product GNI Gross Nationnal Income, Gross National Income GNP Gross Nationnal Product, Gross National Product GO Gross Output, Gross output value

FDI Foreign Direct Investment, Foreign Direct Investment IC Intermediate Cost, Intermediate Cost

ICOR Incremental capital-output ratio, IM Import, Import

NER Nominal Exchange Rate, Nominal Exchange Rate P x ​​Export Price

P M Import price


OEDC Organization for Economic Co-operation and development, Organization for Economic Co-operation and Development

OLS Ordinary Least Square, TFP Total Factor Productivities, Total Factor Productivity USD United States Dollar, United States Dollar

VA Value Added, Value Added VND Vietnamese Dong

Import and Export


WB World Bank, World Bank


WTO World Trade Organization, World Trade Organization


LIST OF TABLES AND FIGURES

Board


Table 2.1. GDP growth of Binh Dinh and the whole country 76

Table 2.2: Summary of development investment capital sources of Binh Dinh province in the period 1990-2005 79

Table 2.3. Investment/GDP ratio of Binh Dinh (BD) and the whole country (CN) 81

Table 2.4. Development investment capital divided by economic sectors 82

Table 2.5. Investment capital structure by economic sectors 82

Table 2.6. GDP structure by industry of Binh Dinh 83

Table 2.7. Investment capital structure by industry of Binh Dinh 83

Table 2.8. Employed labor force by economic sector 84

Table 2.9. Structure of working labor force divided by economic sector 85

Table 2.10. Progress of budget revenue and expenditure compared to GDP 86

Table 2.11. Rate of GDP mobilization into the State budget (% GDP) 87

Table 2.12. Binh Dinh province budget expenditure (1990-2005) 88

Table 2.13. Some indicators to evaluate import and export of Binh Dinh province in the period 1990-2005 89

Table 2.14. Some indicators for assessing import and export (nationwide) 90

Table 2.15 . Comparison of export turnover 91

Table 2.16. Growth rate of industrial and construction GDP 94

Table 2.17 . Structure of industrial product value 95

Table 2.18. GDP growth rate of agriculture-forestry-fishery sector at 1994 comparative prices (%) of Binh Dinh and national average 96

Table 2.19. Growth rate of production value of agriculture, forestry and fishery sectors at 1994 constant prices (%) 97

Table 2.20 . Structure of production value of agriculture, forestry and fishery sectors 98

Table 2.21. Structure of production value of agricultural sectors 98

Table 2.22. Average annual growth rate of agricultural production value (%) 99

Table 2.23. Growth rate of agricultural production value over periods 100

Table 2.24. Growth rate of GDP of service sector at 1994 constant prices 100

Table 2.25. Labor productivity 105

Table 2.26. Contribution of factors to overall growth 107

Table 2.27. Economic structure by industry in Binh Dinh province in the period 1990-2005 109

Table 2.28. Contribution of sectors to growth 111

Table 2.29. Proportion and growth rate of economic sectors……112

Table 2.30. Rate of return on capital of economic sectors 114

Table 3.1. Assessment of the contribution of factors to Binh Dinh's growth 1990-2005 123

Table 3.2. Assessment of the contribution of factors to Binh Dinh's growth 1990-2005 (recovered capital) 126

Table 3.3. Changes in TFP, TE and TC of economic sectors in Binh Dinh province 1990-2005 127

Table 3.4 . Decomposition results of TFP changes (1990-2005) 128

Table 3 .5. Decomposition of results for three economic sectors 129

Table 3.6 . Estimated labor and capital prices for Binh Dinh economy 1990-2005 136

Table 3.7. Estimated capital and labor costs for industry1990-2005 137

Table 3.8. Estimated capital and labor prices for the service sector 1990-2005 139

Table 3.9. Estimated capital and labor prices for the agriculture-forestry-fishery sector (1990-2005) 140

Table 3.10. Investment forecast for Binh Dinh 2006-2010. PAI 145

Table 3.11. Investment forecast for Binh Dinh 2006-2010. PAII 145

Table 3.12. Investment forecast of Binh Dinh 2006-2010. PA.III 146

Table 3.13. Population and labor forecast for Binh Dinh province 2006-2010. PAI 147

Table 3.14. Population and labor forecast of Binh Dinh province 2006-2010, PAII 148

Table 3.15. GDP growth forecast. PAI 149

Table 3.16. Forecast of Binh Dinh economic growth 2006-2010. PAII 149

Table 3.17. Growth forecast of Binh Dinh 2006-2010. PAIII 150

Table 3.18. Forecast of Binh Dinh import and export 2006-2010 152

Table 3.19. Forecast of Binh Dinh province's budget revenue and expenditure 2006-2010 153

Table 3 .20 . PAI 154 growth forecast

Table 3 .21 . PAII 155 growth forecast

Table 3 .22 . PAIII 155 growth forecast

Table 3.23. Calculation results based on simulation I 156

Table 3.24. Forecast of labor demand for the period 2006-2010 according to simulation I ...157

Table 3.25. Forecast of capital demand for the period 2006-2010 according to simulation I 158

Table 3.26 . Forecast of investment demand according to simulation I period 2006-2010 158

Table 3.27 . Forecast of GDP, capital and labor demand according to simulation II 159

Table 3.28. Forecast of economic structure, GDP of sectors 159

Table 3.29. Simulation results I 161

Table 3.30. Simulation results II 162


Image


Figure 1.1. Graph depicting the stability of the steady state 38


Figure 1.2. Graph depicting the impact of investment 39

Figure 2.1. Growth graph of Binh Dinh province from 1990-2005 75

Figure 2.2. GDP growth graph of sectors and the whole economy 76

Figure 2.3. Graph of GDP growth and economic sectors of Binh Dinh 1990-2005 77

Figure 2.4. Graph of GDP growth (TTGDP) and investment/GDP ratio (TLDT) 81

Figure 2.5. Graph comparing budget revenue and GDP 87

Figure 2.6. Graph comparing export, import and GDP growth 92

Figure 2.7. Economic system diagram 93

Figure 2.8 . ICOR coefficient graph of Binh Dinh and the whole country 106

Figure 2.9. Comparison chart of economic structure of Binh Dinh and the whole country 110

Figure 3.1. Economic forecast block diagram of Binh Dinh 143

Figure 3.2. Block diagram of Binh Dinh economic development simulation 156


INTRODUCTION


1. Urgency of the research topic

Rapid and sustainable economic growth is the goal set for all countries and localities. In developed countries, economic growth is a prerequisite for improving people's lives, reducing unemployment, improving social welfare... and solving many other macro issues. In Vietnam, rapid economic growth and sustainable economic development are prerequisites to catch up with economies in the region, striving to become an industrial country by 2020. To achieve that, in reality, there are many issues that need to be solved, in which the analysis and forecasting of the growth and development process of the economy play an important role. Research experience of many countries in the world shows that in order to analyze and forecast scientifically, the current trend is to use modern tools of economic management in the market mechanism, in which the use of economic mathematical models and econometrics is one of the very effective tools.

Along with the general development of the country in the renovation period, localities in general and Binh Dinh province in particular have achieved encouraging economic achievements, the average GDP growth rate in the period of 1996-2000 reached 8.9%; in the period of 2001-2005 reached 9%. However, in that development, the economy of Binh Dinh province still revealed many shortcomings, affecting the growth and sustainable economic development of the province. In order to analyze and forecast economic growth and development on a scientific basis, propose effective measures to develop the province's economy, the researcher chose the topic: "Local economic growth model and application to Binh Dinh province".

In the current period, the issue of national economic growth and local economic growth has attracted the attention of many economists.

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