Analyzing the Link between Transport Infrastructure and Economic Growth: Empirical Evidence from Provinces, Cities in Vietnam

Abstract

This study aims to analyze the relationship of capital investment in transport infrastructure and Vietnam's economic growth in the period 2005-2018. We analyzed data from two independent samples: the first sample includes the ten most developed provinces, cities in Vietnam, and the second sample consists of the remaining 53 provinces, cities. Both cases conclude that the transport capital has contributed to Vietnam's economic development. The analysis also indicates that, for non-central provinces, cities, the productivity of transport capital is greater than the productivity of overall prosperity. It is not the case for central provinces/cities where transport capital is considered as the average yield of aggregate wealth. Based on the analysis, the study proposes some important policy implications to help localities take a long-term perspective in improving existing traffic and building new infrastructure.