Year

2016

Degree Name

Doctor of Philosophy

Department

School of Accounting, Economics and Finance

Abstract

The alleviation of poverty in society is an imperative of governments and an influence on economies around the world. Economic growth has for many decades been believed to be a placatory instrument but reliance on economic development does not necessarily yield optimum results. Hence, poverty reduction has also been a fascination for researchers who seek to target specific questions thus contributing to the social welfare of defined populations. These cumulative efforts of researchers are intended to initiate change in government policies thus transforming the world into the way we would like it to be.

This thesis is dedicated to answering a set of such questions by presenting a quantitative assessment of industry related variables in Vietnam. The study proceeds by integrating conceptual and empirical literature relating to the topic of investigation. The topic of poverty has attracted significant attention and has therefore been studied extensively. Prominent contributors such as economist Amartyr Sen and the World Bank institution are drawn upon to present a concise definition of poverty. Poverty lines are then presented as a mechanism used to initiate quantitative assessments of poverty. This concept is delineated in the context of Vietnam. International and Vietnamese empirical studies are reviewed and a background to Vietnam‘s economic reform process is presented. Together, these initial steps form a platform from which the study emanates.

The thesis then aims to examine the relationship between poverty reduction and the manufacturing sector in Vietnam using household-level and provincial-level data obtained from reliable Vietnamese sources. At the household level, cross-section and panel data models are used to investigate the empirical relationship between the percentage of household members who are employed in the manufacturing sector and household per capita income and household per capita expenditure. Probit models are used to investigate the empirical relationship between the percentage of household members who are employed in the manufacturing sector and a household‘s propensity to fall into poverty. The fraction of household members working in manufacturing sector is found to be positively associated with household per capita income and household per capita expenditure. This study also finds that a household‘s probability of being in poverty is strongly and inversely related to the fraction of that household‘s members working in the manufacturing sector.

At the provincial level, the spatial relationship between poverty and the manufacturing sector is econometrically investigated by estimating cross-section models, fixed effect models as well as spatial lag and spatial error models. The results show that there is a spatial relationship between poverty rates among neighbouring provinces. Furthermore, due to spatial spillovers, that the relationship between employment in manufacturing and poverty reduction is not straighforward. Policymakers need to take into account locational and connectivity issues to ensure that manufacturing activities can contribute effectively towards poverty reduction.

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