Influence of production factors on economic growth in the service sector of Da Nang city

Abstract

This paper uses a quantitative method based on theoretical framework of the Neoclassical Growth Model (Solow) to measure the influence of production factors on economic growth in the Service sector of Da Nang City. The findings, derived from time series data spanning 2010 to 2022, show that production factors positively contribute to the growth of Da Nang’s Service sector and in the following order: Total Factor Productivity (TFP), Labor, and Capital. However, the findings also indicate that the contribution of Capital factor is not commensurate with the investment scale of the Service sector. Additionally, there is a significant dominance in the investment value of the Service sector, compared to the Agriculture - Forestry - Fishery, and Industry - Construction sectors of Da Nang.