Assessing the impact of human capital and digital transformation on economic growth in the central central region of Vietnam: evidence from a panel data model with AR(1)
Abstract
This study investigates the impacts of human capital and digital transformation (ICT) on provincial economic growth in Vietnam’s Central Central Region during 2010–2024, employing a balanced panel and the RE-GLS(AR1) model. The results reveal that human capital exerts a strong and consistent positive effect on economic growth, confirming its central role in enhancing productivity and innovation. Institutional quality (PCI) also shows a significant positive influence, acting as a mediating factor that amplifies the effects of human capital and ICT. Meanwhile, the impact of digital transformation remains positive but statistically unstable, reflecting disparities in digital readiness among provinces. Robustness checks using Driscoll–Kraay estimations confirm the model’s stability over time. The findings highlight a growth structure based on three interlinked pillars – human capital, institutional quality, and technology, providing empirical evidence for regional development and policy reform following Vietnam’s administrative restructuring in July 2025.