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

Quyen Le Hoang Thuy To Nguyen

doi:10.46223/HCMCOUJS.econ.en.14.3.2765.2024

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.

JEL codes

C33; E00; O30; R11

Keywords

digitalization; FMOLS; ICTI; Southeast region; Vietnam

Full Text:

PDF

Cite this paper as:

Nguyen, Q. L. H. T. T. (2024). The relationships between some macro indicators and digitalization process: A study in the Southeast region in Vietnam. Ho Chi Minh City Open University Journal of Science – Economics and Business Administration, 14(3), 44-58. doi:10.46223/HCMCOUJS.econ.en.14.3.2765.2024

References

Acs, Z. J., Audretsch, D. B., & Lehmann, E. E. (2013). The knowledge spillover theory of entrepreneurship. Small Business Economics, 41(77), 757-774.

Adeleye, N., & Eboagu, C. (2019). Evaluation of ICT development and economic growth in Africa. NETNOMICS: Economic Research and Electronic Networking, 20(1), 31-53. doi:10.1007/s11066-019-09131-6

Aghimien, D., Aigbavboa, C., Oke, A., & Aghimien, L. (2022). Latent institutional environment factors influencing construction digitalization in South Africa. International Journal of Construction Education and Research, 18(2), 142-158.

Ahmed, E. M. (2021). Modelling information and communications technology cyber security externalities spillover effects on sustainable economic growth. Journal of the Knowledge Economy, 12(1), 412-430.

Alpidovskaya, M., & Stompeleva, E. (2020). Digitalization of the Russian economy: Institutional strategies, factors and problems. In Scientific and technical revolution: Yesterday, today and tomorrow (pp. 427-434). New York, NY: Springer International Publishing.

Andrews, D., & Nicoletti, G., & Timiliotis, C. (2018). Digital technology diffusion: A matter of capabilities, incentives or both? (No. 1476). Paris, France: OECD Economics Department Working Papers.

Bag, S. (2016). Selection of big data analyst in purchasing and supply management: Fuzzy VIKOR approach. International Journal of Automation and Logistics, 2(4), 294-306.

Bag, S., Pretorius, J. H. C., Gupta, S., & Dwivedi, Y. K. (2021). Role of institutional pressures and resources in the adoption of big data analytics powered artificial intelligence, sustainable manufacturing practices and circular economy capabilities. Technological Forecasting and Social Change, 163(1), 1-14.

Billon, M., Lera-Lopez, F., & Marco, R. (2010). Differences in digitalization levels: A multivariate analysis studying the global digital divide. Review of World Economics, 146(1), 39-73.

Blomström, M., & Kokko, A. (2002). FDI and human capital: A research agenda. Paris, France: OECD Economics Centre Working Papers.

Branstetter, L. (2006). Is foreign direct investment a channel of knowledge spillovers? Evidence from Japan’s FDI in the United States. Journal of International Economics, 68(2), 325-344.

Campos, N. F., & Kinoshita, Y. (2002). Foreign direct investment as technology transferred: Some panel evidence from the transition economies. The Manchester School, 70(3), 398-419.

Chakrabarti, A. (2003). Import competition, employment and wage in US manufacturing: New evidence from multivariate panel cointegration analysis. Applied Economics, 35(13), 1445-1449.

Chakraborty, J., & Bosman, M. M. (2005). Measuring the digital divide in the United States: Race, income, and personal computer ownership. The Professional Geographer, 57(3), 395-410.

Coe, D. T., & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39(5), 859-887.

Cruz-Jesus, F., Oliveira, T., Bacao, F., & Irani, Z. (2017). Assessing the pattern between economic and digital development of countries. Information Systems Frontiers, 19(4), 835-854.

De Hoyos, R. E., & Sarafidis, V. (2006). Testing for cross-sectional dependence in panel-data models. The Stata Journal, 6(4), 482-496.

Gallant, A. R. (1975). Nonlinear regression. The American Statistician, 29(2), 73-81.

General Statistic Office. (2022). Annual statistical book. Hanoi, Vietnam: General Statistic Office.

Greene, W. (2012). Econometric analysis (7th ed.). New York, NY: Pearson.

Hsiao, C., & Tahmiscioglu, A. K. (2008). Estimation of dynamic panel data models with both individual and time-specific effects. Journal of Statistical Planning and Inference, 138(9), 2698-2721.

Hussain, H., Wen, J., Jiang, R., Waheed, J., Ali, W., & Khan, N. A. (2023). Analyzing the role of ICT in bridging the digital divide: A transitional analytical framework for ICT access to impact. Library Hi Tech, Vol. ahead of print No. ahead of print.

Huynh, L. T. D., & Truong, L. N. (2023). Impacts of globalisation on economic growth in Europe Union countries. Ho Chi Minh City Open University Journal of Science- Economics and Business Administration, 13(1), 87-102.

Hysa, E., & Hodo, L. (2016). Foreign direct investment and economic growth in Albania: A co-integration analysis. Ekonomia Międzynarodowa, 15(4), 234-244.

Jauhari, A., & Mohammed, N. (2021). Does foreign direct investment promote skill upgrading in developing countries? Empirical evidence from Malaysia. The Journal of Asian Finance, Economics and Business, 8(4), 289-306.

Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90(1), 1-44.

Katz, J. E., Rice, R. E. (2002). Social consequences of Internet use, access, involvement and interaction. Cambridge, MA: MIT Press.

Kuo, H. M., Chen, T. L., & Yang, C. S. (2022). The effects of institutional pressures on shipping digital transformation in Taiwan. Maritime Business Review, 7(2), 175-191.

Lall, S. (2003). Foreign direct investment, technology development and competitiveness: Issues and evidence. Competitiveness, FDI and Technological Activity in East Asia, 12-56.

Le, T. T., & Le, D. A. (2023). Does digital transformation increase efficiency in business? Evidence from Vietnam during the Covid-19 pandemic. In Business innovation for the post-pandemic era in Vietnam (pp. 25-33). Singapore: Springer Nature.

Le, T., Ngo, T., Ho, T., & Nguyen, D. (2022). ICT as a key determinant of efficiency: A Bootstrap-Censored Quantile Regression (BCQR) analysis for Vietnamese banks. International Journal of Financial Studies, 10(2), 1-15.

Legner, C., Eymann, T., Hess, T., Matt, C., Böhmann, T., Drews, P., … Ahlemann, F. (2017). Digitalization: Opportunity and challenge for the business and information systems engineering community. Business & Information Systems Engineering, 59(7), 301-308.

Liu, H., Ke, W., Wei, K. K., Gu, J., & Chen, H. (2010). The role of institutional pressures and organizational culture in the firm’s intention to adopt internet-enabled supply chain management systems. Journal of Operations Management, 28(5), 372-384.

Lo, V. T. H., Guzikova, L., & Nguyen, T. A. (2022). Evaluation of e-commerce impact on sustainable economic growth: The case of Vietnam. In Innovations in digital economy: Third international scientific conference, SPBPU IDE 2021, Saint Petersburg, Russia, October 14-15, 2021, revised selected papers (pp. 101-111). New York, NY: Springer International Publishing.

Manyika, J., Ramaswamy, S., Khanna, S., Sarrazin, H., Pinkus, G., Sethupathy, G., & Yaffe, A. (2015). Digital America: A tale of the haves and have-mores. New York, NY: McKinsey Global Institute.

Ministry of Information and Communications. (2023). Annual report of ICT index. Retrieved October 10, 2022, from https://mic.gov.vn/solieubaocao/Pages/TinTuc/143252/Bao-cao-Vietnam-ICT-Index.html

Mulaydinov, F. (2021). Digital economy is a guarantee of government and society development. Ilkogretim Online, 20(3), 1474-1479.

Myovella, G., Karacuka, M., & Haucap, J. (2020). Digitalization and economic growth: A comparative analysis of Sub-Saharan Africa and OECD economies. Telecommunications Policy, 44(2), 1-12.

Nair, M., Pradhan, R. P., & Arvin, M. B. (2020). Endogenous dynamics between R&D, ICT and economic growth: Empirical evidence from the OECD countries. Technology in Society, 62(8), 1-12.

Napiórkowski, T. M. (2019). Significance of foreign direct investment to the digital competitiveness of the polish economy. Competitiveness Report 2019, 139(8), 139-158.

Nasi, G., Cucciniello, M., Mele, V., Valotti, G., Bazurli, R., de Vries, H., … Monthuber, E. M. (2015). Determinants and barriers of adoption, diffusion and upscaling of ICT-driven social innovation in the public sector: A comparative study across 6 EU countries. Learning from Innovation in Public Sector Environments, Italy, 5(1), 4-20.

Ngo, H. T. (2023). Green investment, financial development, digitalization and economic sustainability in Vietnam: Evidence from a quantile-on-quantile regression and wavelet coherence. Technological Forecasting and Social Change, 186(1), 1-15.

Nguyen, D. T., & Nguyen, T. M. (2021). Digital transformation meets national development requirements. Linguistics and Culture Review, 5(S2), 892-905.

Nguyen, H. T. X., & Nguyen, T. T. (2021). A model for assessing the digital transformation readiness for Vietnamese SMEs. Journal of Eastern European and Central Asian Research (JEECAR), 8(4), 541-555.

Nguyen, H. T. X., Tran, N. T. B., Dao, B. T., Barysheva, G., Nguyen, T. C., Nguyen, H. A., & Tran, L. S. (2022). Elderly people’s adaptation to the evolving digital society: A case study in Vietnam. Social Sciences, 11(8), 1-17.

Nguyen, H. T., Le, H. T., & Bui, A. T. M. (2023). Scrutinizing time-varying interlinkages between digitalization, green technologies, CO2 emission, and energy productivity in Vietnam. Journal of Cleaner Production, 415(8), 1-12.

Nguyen, P. A., Nguyen, V. A., Ho, M. T. H., & To, T. T. T. (2021). Diversification of business and technical efficiency of companies in Vietnam. Journal of Eastern European and Central Asian Research (JEECAR), 8(4), 481-494.

Nguyen, T. M. (2023). Impacts of digital transformation on manufacture in Vietnam. VNU Journal of Science: Policy and Management Studies, 39(2), 34-45.

Organization of Economic Cooperation and Development - OECD. (2019). OECD skills outlook 2019: Thriving in a digital world. Retrieved October 10, 2022, from https://www.oecd-ilibrary.org/education/oecd-skills-outlook-2019_df80bc12-en

Organization of Economic Cooperation and Development - OECD. (2020). OECD digital economy outlook 2020. Retrieved October 10, 2022, from https://www.oecd-ilibrary.org/sites/bb167041-en/index.html?itemId=/content/publication/bb167041-en

Özsoy, S., Ergüzel, O. Ş., Ersoy, A. Y., & Saygılı, M. (2022). The impact of digitalization on export of high technology products: A panel data approach. The Journal of International Trade & Economic Development, 31(2), 277-298.

Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61(S1), 653-670.

Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels (University of Cambridge, Faculty of Economics, Cambridge Working Papers in Economics, 0435). Germany: Center for Economic Studies and Ifo Institute Economic Research - CESifo.

Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22(2), 265-312.

Pesaran, M. H. (2021). General diagnostic tests for cross-sectional dependence in panels. Empirical Economics, 60(1), 13-50.

Pham, U. T. M. (2020). Study of factors affecting micro-barriers that hinders the development of private enterprises: Mediating role of intention to use of renewable energy. International Journal of Energy Economics and Policy, 10(6), 594-601.

Political Bureau. (2022). Resolution 24-NQ/TW of the Political Bureau on the socio-economic development of the Southeastern region. Retrieved September 01, 2023, from https://xaydungchinhsach.chinhphu.vn/toan-van-nghi-quyet-24-nq-tw-cua-bo-chinh-tri-ve-phat-trien-ktxh-vung-dong-nam-bo-119221022225448428.htm

Powell, W. W., & DiMaggio, P. J. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147-160.

PSO (Provincial Statistics Office). (2023). Annual statistical books 2006-2022. Southeastern Provinces, Vietnam: Provincial Statistics Office.

Quibria, M. G., Ahmed, S. N., Tschang, T., & Reyes-Macasaquit, M. L. (2003). Digital divide: Determinants and policies with special reference to Asia. Journal of Asian Economics, 13(6), 811-825.

Reddick, C. G., Enriquez, R., Harris, R. J., & Sharma, B. (2020). Determinants of broadband access and affordability: An analysis of a community survey on the digital divide. Cities, 106(11), 1-12.

Rogers, E. M. (2003). Diffusion of innovations (5th ed.). New York, NY: Free Press.

Röller, L. H., & Waverman, L. (2001). Telecommunications infrastructure and economic development: A simultaneous approach. American Economic Review, 91(4), 909-923.

Sahoo, M., & Sethi, N. (2020). An empirical insight into the financial globalization-growth nexus via trade openness: Evidence from select south Asian countries. Global Business Review, 24(2), 317-334.

Semyachkov, K. A. (2019, May). Digital economy in developing countries: Problems and prospects. In 1st International scientific conference “Modern Management Trends and the Digital Economy: From regional development to global economic growth” (MTDE 2019) (pp. 102-106). Netherland: Atlantis Press.

Sugiharti, L., Yasin, M. Z., Purwono, R., Esquivias, M. A., & Pane, D. (2022). The FDI spillover effect on the efficiency and productivity of manufacturing firms: Its implication on open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(2), 1-20.

Telukdarie, A., Buhulaiga, E., Bag, S., Gupta, S., & Luo, Z. (2018). Industry 4.0 implementation for multinationals. Process Safety and Environmental Protection, 118(8), 316-329.

Toader, E., Firtescu, B. N., Roman, A., & Anton, S. G. (2018). Impact of information and communication technology infrastructure on economic growth: An empirical assessment for the EU countries. Sustainability, 10(10), 1-22. doi:10.3390/su10103750

Van Dijk, J. A. (2006). Digital divide research, achievements and shortcomings. Poetics, 34(4/5), 221-235.

Vietnam Association for Information Proccessing - VAIP. (2006). Annual report of ICT index. Retrieved October 10, 2022, from https://egov.chinhphu.vn/Resources/2016_03_11/37203/%20BC_VN_ICT_Index_2005_(LHH).pdf

Wang, J., Wang, W., Ran, Q., Irfan, M., Ren, S., Yang, X., … Ahmad, M. (2022). Analysis of the mechanism of the impact of internet development on green economic growth: Evidence from 269 prefecture cities in China. Environmental Science and Pollution Research, 29(9), 1-15.

Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data. New York, NY: MIT Press.

Yu, G., & Zhou, X. (2021). The influence and countermeasures of digital economy on cultivating new driving force of high-quality economic development in Henan Province under the background of “double circulation”. Annals of Operations Research, 326(31), 1-22.

Yu, L. (2011). The divided views of the information and digi- tal divides: A call for integrative theories of information inequality. Journal of Information Science, 37(6), 660-679. doi:10.1177/0165551511426246

DOI: https://doi.org/10.46223/HCMCOUJS.econ.en.14.3.2765.2024

14(3)2024