The Impact of Fiscal Decentralization on Economic Growth in Vietnam

Abstract

Approaching the spatial regression method, the study analyzed the impact of fiscal decentralization on economic growth in 63 provinces/cities in Vietnam from 2010 to 2020. The findings indicate that fiscal decentralization management positively impacts the economic growth of provinces in Vietnam. Accordingly, the regression results show that revenue decentralization and expenditures decentralization have a positive effect and present a spillover effect on provinces in improving the gross regional domestic product (GRDP) per capita. In addition, the study also found that foreign direct investment, Provincial Competitiveness Index (PCI), private investment, and trade openness boost economic growth. Finally, based on empirical research results, the study gives some policy implications on the improvement of fiscal decentralization to contribute to economic growth in Vietnam.