The relationships between some macro indicators and digitalization process: A study in the Southeast region in Vietnam

Abstract

This study aims to investigate the relationships between some macro indicators and the digitalization process in the Southeast region of Vietnam. The panel Fully Modified Ordinary Least Squares (FMOLS) has been employed with the data of 2005 - 2021 to capture the long-run relationship of the variables in the digitalization model. Income (GRDP), Foreign Direct Investment (FDI), and education (WQ) have a positive relationship with the digitalization with significant level of 1% while the role of institutional factor (PED) has not been found. The negative coefficient of the squared terms of both GRDP and FDI in the digitalization model indicates that a higher level of GRDP and FDI may not always lead to a higher level of digitalization, meaning that the region may not have the necessary resources or capacity to fully utilize the benefits of digital technologies. The findings have important practical implications for policymakers in developing human capital to fully capture the benefits of GRDP and FDI on digitalization.