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Using Solow and I–O models to determine the factors impacting economic growth in Ho Chi Minh City, Vietnam

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  • Canh Thi Nguyen

    (University of Economics and Law-Vietnam National University-Ho Chi Minh City)

Abstract

This study empirically investigates the determinants of economic growth in Ho Chi Minh City (HCMC) and its industry groups from 2006 and 2015 using the Solow model combined with input–output (I–O) tables. The results show that capital mainly contributes to a strong growth of the economy in HCMC. The findings also indicate an improvement in total factor productivity and its increasing contribution towards HCMC economic growth. In contrast, the contribution of labor towards HCMC economic growth is found to be reduced which transfer its significant role to TFP. This result implies that growth quality of HCMC has been lifted and has based more on human capital. The study also estimates contributing level of productive factors towards the growth of industry groups and backward linkage and forward linkage coefficients of product groups. Therefore, our research has implications for the local government to develop the sustainable economy in the future.

Suggested Citation

  • Canh Thi Nguyen, 2019. "Using Solow and I–O models to determine the factors impacting economic growth in Ho Chi Minh City, Vietnam," Asia-Pacific Journal of Regional Science, Springer, vol. 3(1), pages 247-271, February.
    • Handle: RePEc:spr:apjors:v:3:y:2019:i:1:d:10.1007_s41685-018-0094-0
    DOI: 10.1007/s41685-018-0094-0
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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    3. Camelia SURUGIU, 2009. "The Economic Impact of Tourism. An Input-Output Analysis," Romanian Journal of Economics, Institute of National Economy, vol. 29(2(38)), pages 142-161, December.
    4. Dave Liu, 2007. "Growth Theory and Application: The Case of South Africa," Working Papers 200714, University of Pretoria, Department of Economics.
    5. Lee, Taihyeong & Mokhtarian, Patricia L., 2004. "An Input-Output Analysis of the Relationships Between Communications and Travel for Industry," University of California Transportation Center, Working Papers qt55x4h2r2, University of California Transportation Center.
    6. Bui Trinh & Kiyoshi Kobayashi & Nguyen Viet Phong, 2012. "Vietnam Economic Structure Change Based on Input-Output Table (2000-2007)," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(1), pages 224-232, March.
    7. Baumol, William J. & Wolff, Edward N., 1994. "A key role for input-output analysis in policy design," Regional Science and Urban Economics, Elsevier, vol. 24(1), pages 93-113, February.
    8. Raihan, Selim & Khondker, Bazlul Haque, 2010. "Backward and Forward Linkages of the Textile and Clothing Industry in India, Bangladesh and Pakistan," MPRA Paper 41231, University Library of Munich, Germany.
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    Cited by:

    1. Dinh, Hien Thi Thu & Nguyen, Quyen Le Hoang Thuy To & Nguyen, Phong Thanh, 2022. "Evaluate Ho Chi Minh City Sustainability Using Fuzzy Extent Analysis Method," MPRA Paper 116677, University Library of Munich, Germany, revised Dec 2022.
    2. Nauli Aisyiyah Desdiani & Syahda Sabrina & Meila Husna & Amalia Cesarina Budiman & Fachry Abdul Razak Afifi & Alin Halimatussadiah, 2022. "Local Budget Resilience in Times of COVID-19 Crisis: Evidence from Indonesia," Economies, MDPI, vol. 10(5), pages 1-18, May.
    3. Seung-hun Chung, 2020. "The impact of regional environmental amenity on skill aggregation across regions in developing countries: evidence from air pollution in China," Asia-Pacific Journal of Regional Science, Springer, vol. 4(1), pages 27-53, February.

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    More about this item

    Keywords

    Ho Chi Minh City’s economic growth; Solow model; I/O table; Total factor productivity; Backward and forward linkage coefficients;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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