DOES TOURISM DRIVE SUSTAINABLE GROWTH? THE ROLE OF URBANIZATION, HUMAN CAPITAL, AND DIGITAL INFRASTRUCTURE IN VIETNAM

Abstract

This study examines the relationship between tourism development, urbanization, and sustainable economic growth in Vietnamese provinces. It uses a dynamic panel-data framework to analyze provincial data from 2006 to 2024. The analysis employs an extended Cobb-Douglas production function and incorporates tourism development, urbanization, digital infrastructure, human capital, and capital accumulation as key growth determinants. To address issues such as endogeneity, reverse causality, and unobserved heterogeneity, the study applies the System Generalized Method of Moments. The empirical results indicate that urbanization and capital accumulation are the strongest drivers of regional economic growth. Human capital also contributes positively by enhancing productivity and facilitating technological absorption while digital infrastructure shows conditional effects. However, tourism development does not have a statistically significant direct impact on provincial economic output. The evidence suggests that tourism is not a primary driver of provincial growth in the absence of broader structural transformation processes. The findings highlight the central role of urban development, investment inflows, and workforce upgrading in sustaining regional economic expansion. From a policy perspective, this implies that tourism strategies should be integrated within broader urban planning and structural development frameworks. This integration can enhance long-term economic sustainability in emerging economies.