Analysis of the impact of state budget revenue on gross regional domestic product in the context of digital transformation in Vietnam

Abstract

This study investigates the impact of state budget revenue on Gross Regional Domestic Product (GRDP) within the context of digital transformation in Vietnam. Using panel data from five major cities over the period 2015-2021, the research applies the Pooled Ordinary Least Squares (POLS) model to estimate the relationship between fiscal capacity and regional economic growth. The empirical findings demonstrate that state budget revenue exerts a significantly positive effect on GRDP, thereby confirming its crucial role in promoting regional economic performance. Furthermore, variables representing the digital environment and digital transformation are also found to contribute positively to local economic growth, highlighting the importance of technological modernization in enhancing fiscal efficiency and growth dynamics. These results imply that state budget revenue, when efficiently mobilized and allocated in alignment with digital transformation strategies, can serve as a pivotal instrument to foster sustainable regional development. Policy recommendations are proposed accordingly.