Impact of human capital on joint-venture investment in Vietnam

Commitments of joint-venture investment in Vietnam expanded rapidly during 1988-93 as foreign firms eagerly took advantage of the economy's opening. T his investment concentrated heavily in the metropolitan core regions; never theless, investors remained sensitive to human capital considerations, cont rolling for income. They committed greater capital to provinces with higher levels of literacy, and poorer provinces outside the core also gained disp roportionately. The nuanced locational choices for joint-venture investment s suggest that Vietnamese partners provided sophisticated environmental sca ns to take advantage of high-quality labor, regardless of income level. Pro jected investments favor the South somewhat disproportionately, contributin g to disparity in development. (C) 1999 Elsevier Science Ltd. All rights re served.