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The impact of public expenditure on economic growth in Vietnamese localities: Research in the context of the impact of Covid-19

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  • Phan Thi Hang Nga

    (University of Finance)

  • Pham Minh Tien

    (University of Finance)

Abstract

The article studies the impact of provincial public expenditure on economic growth in Vietnamese localities in the context of the impact of Covid-19, with balance panel data of 63 provinces and cities collected in the period 2012 - 2021 (Covid-19 pandemic from 2020 to 2021). The results of the model estimate using the least feasible squared method show that public spending positively impacts economic growth in localities even in the context of the impact of Covid-19. The presence of Covid-19 has had a strong negative effect on economic growth in localities considering both the number of infections and the period of infection and has significantly reduced the impact of public expenditure, extra-budget investment, and human resources. This result is consistent with the actual situation in Vietnam during the Covid-19 pandemic. An interesting finding of the study is that the negative impact of corruption on local economic growth has decreased significantly in the context of the impact of Covid-19. Therefore, improving the efficiency of public expenditure, attracting extra-budget investment, and promoting the efficiency of local labor resources are still important to contribute to promoting economic growth in Vietnamese localities.

Suggested Citation

  • Phan Thi Hang Nga & Pham Minh Tien, 2024. "The impact of public expenditure on economic growth in Vietnamese localities: Research in the context of the impact of Covid-19," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 14(1), pages 50-64.
    • Handle: RePEc:bjw:econen:v:14:y:2024:i:1:p:50-64
    DOI: 10.46223/HCMCOUJS.econ.en.14.1.2565.2023
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    More about this item

    Keywords

    Covid-19; economic growth; provincial public expenditure; Vietnam;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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