Impacts of afta on government revenue, external trade and FDI of Lao PDR

The main objectives of this dissertation are twofold as follows: To review the economic performance of Lao PDR before and after participating AFTA; to estimate the impacts in implementing the Common Effective Preferential Tariff (CEPT) scheme under AFTA on the Lao PDR’s government revenue, external trade (exports and imports), and Foreign Direct Investment (FDI) flows.
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Impacts of afta on government revenue, external trade and FDI of Lao PDRMINISTRY OF EDUCATION AND TRANING MINISTRY OF EDUCATION AND SPORTNATIONAL ECONOMICS UNIVERSITY NATIONAL UNIVERSITY OF LAOS VIETNAM LAOS ATHSAPHANGTHONG SIPHANDONEIMPACTS OF AFTA ON GOVERNMENT REVENUE, EXTERNAL TRADE, AND FDI OF LAO PDRA dissertation Submitted to the National Economics University, Vietnam and National University of Laos in fulfillment of requirements for the degree of Doctor of Philosophy in Economics Supervisor: Prof. Dr. TRAN THO DAT VIENTIANE – 2014 ii ACKNOWLEDGEMENT My sincere appreciation and heartfelt thanks are expressed to my supervisor,Professor Tran ThoDat, for his regular provision of invaluable pieces of advice,guidance, correction, and encouragement to me throughout this research. Thisdissertation could not have been successfully accomplished without hiscontributions and supports. Also, I would like to dedicate this success to my beloved parents andespecially to my everlasting dearest wife, my lovely children, who all the time staybeside me with their love and caring. I would not be able to achieve this successwithout their continuous supports and great deal of encouragements. iii TABLE OF CONTENTSACKNOWLEDGEMENT ....................................................................................... iiTABLE OF CONTENTS ........................................................................................ iiiLIST OF TABLES ....................................................................................................vLIST OF FIGURES ................................................................................................ viABBREVIATIONS AND ACRONYMS ............................................................... viCHAPTER 1: INTRODUCTION ............................................................................11.1 Background ....................................................................................................11.2 Problem Statement ........................................................................................61.3 Objective.........................................................................................................81.4 Expected Outcomes .......................................................................................81.5 Significance of Study .....................................................................................81.6 Scope of Study................................................................................................91.7 Organization of the Dissertation ..................................................................9CHAPTER 2: LITERATURE REVIEW ..............................................................112.1 Theoretical Literature Review ...................................................................112.1.1 Definition and Levels of Economic Integration ............................................112.1.2 Advantages and Disadvantages of Regional Economic Integration .............132.1.3 ASEAN and AFTA .......................................................................................172.1.4 Challenges and Opportunity for Lao PDR after Joining ASEAN ................282.2 Empirical Literature Review......................................................................30CHAPTER 3: ANALYTICAL METHODOLOGY AND DATA COLLECTION ............................................................................................433.1 Analytical Methodology ..............................................................................433.1.1 Descriptive Approach ....................................................................................43 iv3.1.2 Econometric Approach ..................................................................................443.2 Data Collection ............................................................................................51CHAPTER 4: IMPACTS OF AFTA ON ECONOMIC PERFORMANCE,GOVERNMENT REVENUE, EXTERNAL TRADE AND FDI ........................534.1 Lao PDR Economic Performance During 1990-2012 ..............................534.1.1 Growth Rate ..................................................................................................534.1.2 Output Structure ............................................................................................584.1.3 GDP per Capita .............................................................................................614.2 Impacts on Government Revenue ..............................................................634.2.1. Total Revenue ...............................................................................................634.2.2. Tax and Non-Tax Revenue ...........................................................................664.3 Impacts on External Trade.........................................................................714.3.1. Exports, Imports and Trade Balance, 1990-2012..........................................714.3.2. Direction of Exports and Imports ..................................................................774.3.3. Degree of Trade Openness ............................................................................804.4 Impacts on Foreign Direct Investment ......................................................854.5 Empirical Evidence of Impacts of AFTA on Government Revenue, ...