The Impact of Taxation and Economic Restructuring on Economic Growth in the Key Southern Economic Region in Vietnam

Abstract

The article investigates the impact of taxation and economic restructuring on economic growth in the Key Southern Economic Region (KSER) in Vietnam from 2005 to 2021. We use OLS, FEM, REM, and GLS models to estimate the parameters. Additionally, there is an endogeneity issue when introducing lagged variables into the model; therefore, we employ GMM to overcome endogeneity. The research indicates that taxes hurt economic growth in the KSER. Additionally, the study also shows that economic restructuring, along with labour force (LD), information and communications technology (CNTT), and foreign direct investment (FDI), do not influence economic growth. Based on our overall findings, the article proposes some policy recommendations and fundamental solutions to leverage the economic structural shift for economic growth in this region.