This study examines the convergence of economic development among Vietnam’s provinces over the period 2018 to 2023. As regional inequality remains a pressing policy concern, understanding whether provinces are converging is crucial for evaluating the effectiveness of national and local development strategies. Drawing on the club convergence framework developed by Phillips and Sul, Transition modeling and econometric convergence tests. Econometrica, 75(6):1771–1855 (2007), the study applies the log(t) test to provincial GRDP per capita data to detect heterogeneous patterns of convergence. The analysis identifies multiple “convergence clubs,” indicating that provinces do not follow a uniform growth path, but rather cluster into multiple group equilibrium with similar long-term income trajectories. High-income clusters are observed in the Northern and Southern Key Economic Regions, while low-income clusters are concentrated in the mountainous areas of Northern Vietnam. Following the club classification, the study employs an Ordered Logit model to explore the structural and economic factors associated with club membership. Explanatory variables include cumulative foreign direct investment (FDI), population density, human capital indicators, and industrial structure. Both internal and external factors significantly affect the formation of convergence clubs. The results suggest that provinces with higher FDI, denser populations, and more development in Information and communication technology are more likely to belong to higher-income convergence clubs. Conversely, less developed provinces remain in lower-performing groups. The findings provide evidence of persistent spatial inequality and offer policy insights for promoting inclusive regional development, particularly by enhancing investment attraction and industrial capacity building in economically disadvantaged provinces.

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The Club Convergence in Development Among Provinces in Vietnam

  • Dinh Nu Huong Tra

摘要

This study examines the convergence of economic development among Vietnam’s provinces over the period 2018 to 2023. As regional inequality remains a pressing policy concern, understanding whether provinces are converging is crucial for evaluating the effectiveness of national and local development strategies. Drawing on the club convergence framework developed by Phillips and Sul, Transition modeling and econometric convergence tests. Econometrica, 75(6):1771–1855 (2007), the study applies the log(t) test to provincial GRDP per capita data to detect heterogeneous patterns of convergence. The analysis identifies multiple “convergence clubs,” indicating that provinces do not follow a uniform growth path, but rather cluster into multiple group equilibrium with similar long-term income trajectories. High-income clusters are observed in the Northern and Southern Key Economic Regions, while low-income clusters are concentrated in the mountainous areas of Northern Vietnam. Following the club classification, the study employs an Ordered Logit model to explore the structural and economic factors associated with club membership. Explanatory variables include cumulative foreign direct investment (FDI), population density, human capital indicators, and industrial structure. Both internal and external factors significantly affect the formation of convergence clubs. The results suggest that provinces with higher FDI, denser populations, and more development in Information and communication technology are more likely to belong to higher-income convergence clubs. Conversely, less developed provinces remain in lower-performing groups. The findings provide evidence of persistent spatial inequality and offer policy insights for promoting inclusive regional development, particularly by enhancing investment attraction and industrial capacity building in economically disadvantaged provinces.