356 HỘI THẢO KHOA HỌC QUỐC GIA VỀ LOGISTICS VÀ QUẢN LÝ CHUỖI CUNG ỨNG VIỆT NAM LẦN THỨ 4 (CLSCM-2024) INFRASTRUCTURE AND ECONOMIC GROWTH IN VIETNAM: THE ROLE OF LOGISTICS PERFORMANCE MỐI QUAN HỆ GIỮA CƠ SỞ HẠ TẦNG VÀ TĂNG TRƯỞNG KINH TẾ Ở VIỆT NAM: VAI TRÒ CỦA HIỆU SUẤT LOGISTICS NGUYEN CONG HOA* , NGUYEN THI DIEU HIEN Faculty of International Economic Relations, University of Economics and Law *Email:
[email protected] Abstract This study examines the dynamic interplay between infrastructure quality, logistics performance, and economic growth in Vietnam, utilizing an Autoregressive Distributed Lag (ARDL) model with annual data from 2007 to 2023. Our findings reveal a positive and significant relationship between infrastructure improvements and both logistics performance and economic growth. Importantly, we uncover a nuanced dynamic where the positive impact of infrastructure on economic growth is often preceded by a period of adjustment, highlighting the potential for short-term economic disruptions and the need for strategic project implementation. While evidence for a long-run equilibrium relationship is limited by our data, this study underscores the crucial role of infrastructure development in enhancing logistics performance and ultimately driving economic growth in Vietnam. Our findings provide valuable insights for policymakers seeking to optimize infrastructure investments and foster sustainable economic development by highlighting the importance of considering the complex and dynamic nature of these interrelationships. Keywords: ARDL Model, Economic Growth, Infrastructure, Logistics Performance, Vietnam. Tóm tắt Nghiên cứu này phân tích mối quan hệ giữa chất lượng cơ sở hạ tầng, hiệu suất logistics và tăng trưởng kinh tế tại Việt Nam, sử dụng mô hình Tự hồi quy Phân phối Trễ (ARDL) với dữ liệu hàng năm từ 2007 đến 2023. Kết quả cho thấy việc cải thiện cơ sở hạ tầng có mối quan hệ tích cực và có ý nghĩa thống kê với cả hiệu suất logistics và tăng trưởng kinh tế. Đáng chú ý, nghiên cứu phát hiện rằng tác động tích cực của cơ sở hạ tầng đối với tăng trưởng kinh tế có thể dẫn đến những biến động ngắn hạn trước khi ổn định, điều này cho thấy khả năng xảy ra các gián đoạn kinh tế ngắn hạn và nhấn mạnh nhu cầu xây dựng chiến lược để đầu tư vào các dự án cơ sở hạ tầng. Mặc dù dữ liệu hiện có hạn chế trong việc chứng minh mối quan hệ dài hạn, nghiên cứu này vẫn nhấn mạnh vai trò quan trọng của phát triển cơ sở hạ tầng trong việc nâng cao hiệu suất logistics và thúc đẩy tăng trưởng kinh tế tại Việt Nam. Những phát hiện này cung cấp thông tin quan trọng cho các nhà hoạch định chính sách nhằm tối ưu hóa đầu tư vào cơ sở hạ tầng và thúc đẩy phát triển kinh tế bền vững, đồng thời nhấn mạnh tầm quan trọng của việc xem xét tính phức tạp và tác động của các mối quan hệ này. Từ khoá: ARDL Model, Economic Growth, Infrastructure, Logistics Performance, Vietnam. Introduction Infrastructure development is widely recognized as a key driver of economic growth, particularly for export-oriented economies like Vietnam (Banerjee, Duflo, & Qian, 2020; Nguyen, Luong, & Hoang, 2021). Recognizing this, Vietnam has been actively pursuing fiscal policies prioritizing infrastructure investments. A robust infrastructure network can significantly enhance logistics performance, facilitating the efficient movement of goods and services, which in turn stimulates trade and economic growth (Sénquiz-Díaz, 2021; Bayoumi et al., 2021). Given Vietnam's heavy reliance on international trade, a critical question arises: To what extent does infrastructure development translate into improved logistics performance, ultimately contributing to sustained economic growth? While previous studies have explored these relationships (Banerjee et al., 2020), a comprehensive assessment of their interrelationships in the Vietnamese context, particularly using robust time series analysis, is lacking. For instance, Nguyen et al. (2021) found that while infrastructure improvements generally lead to
357 HỘI THẢO KHOA HỌC QUỐC GIA VỀ LOGISTICS VÀ QUẢN LÝ CHUỖI CUNG ỨNG VIỆT NAM LẦN THỨ 4 (CLSCM-2024) positive economic impacts, other factors like customs procedures can hinder this relationship. Their study highlights the complex interplay of variables within Vietnam's logistics sector and its impact on economic growth. This study aims to bridge this gap by empirically evaluating the dynamic relationships between infrastructure quality (IS), logistics performance (LPI), and GDP growth in Vietnam. Utilizing an Autoregressive Distributed Lag (ARDL) model, which is well-suited for analyzing time series data, we investigate three primary hypotheses: (1) whether improvements in infrastructure quality lead to a more efficient and robust logistics sector (measured by LPI), (2) whether enhanced logistics performance subsequently contributes to Vietnam's overall economic growth (measured by GDP), and (3) whether infrastructure quality has a direct and positive impact on GDP growth in Vietnam. This analysis will provide valuable insights for policymakers to optimize infrastructure investments and foster sustainable economic development in Vietnam. 1. Theoretical Overview Several theoretical frameworks provide a foundation for understanding the interconnectedness of infrastructure, logistics, and economic development: New Institutional Economics: This theory, pioneered by North (1990), posits that institutions, both formal (laws, regulations) and informal (norms, trust), play a crucial role in shaping economic outcomes. Improved infrastructure, often a result of effective governance and investment, reduces transaction costs, enhances market efficiency, and fosters economic growth (Acemoglu & Robinson, 2013). Growth Theory with Endogenous Infrastructure: This framework recognizes infrastructure as a key factor of production, alongside capital and labor. Investments in infrastructure enhance productivity, reduce transportation costs, and expand market access, leading to sustained economic growth (Barro, 1990). Global Value Chains (GVCs): In today's interconnected world, efficient logistics networks are crucial for participating in and benefiting from GVCs (Baldwin, 2018). Countries with robust infrastructure and well-developed logistics sectors are better positioned to attract foreign investment, integrate into global production networks, and achieve higher levels of economic development. 2. Literature Review The extensive body of research exploring the influence of infrastructure on logistics performance and economic growth can be synthesized into three overarching themes: 2.1. The Impact of Infrastructure on Logistics Performance The critical link between robust infrastructure and optimized logistics performance is well-documented, particularly for developing economies seeking to enhance their global competitiveness. Sénquiz-Díaz (2021) specifically examines the impact of transport infrastructure quality on logistics performance within the context of exports. The study reveals a strong correlation between high-quality transport infrastructure, such as well-maintained roads and efficient port facilities, and improved logistics performance, ultimately leading to increased export levels and enhanced trade competitiveness. Building upon this understanding of transportation infrastructure's significance, Bayoumi et al. (2021) delve deeper into the specific role of road transport infrastructure investments in shaping logistics performance. Their research highlights that efficient road networks not only facilitate the smooth and timely movement of goods, reducing transportation costs and lead times, but also contribute significantly to broader economic and social development by bridging regional gaps and creating new opportunities. Given Vietnam's burgeoning economy and strategic location within Asian trade routes, further research exploring the specific impact of these infrastructural improvements on logistics performance within the Vietnamese context is crucial. Such research would provide invaluable insights to guide strategic infrastructure investments, ultimately unlocking the nation's full economic potential. 2.2. The Contribution of Logistics Performance to Economic Growth Two impactful studies, conducted in distinct geographical contexts, underscore the often- overlooked contribution of logistics performance to economic growth. Tang and Abosedra's (2019) research, analyzing 23 Asian economies from 2010 to 2016, highlights logistics performance as a crucial driver of economic growth, often overshadowed by factors like exports. Meanwhile, taking an unprecedented approach, Chakamera & Pisa (2021) delve into the association between six specific logistics indicators and economic growth in 32
358 HỘI THẢO KHOA HỌC QUỐC GIA VỀ LOGISTICS VÀ QUẢN LÝ CHUỖI CUNG ỨNG VIỆT NAM LẦN THỨ 4 (CLSCM-2024) African countries, employing the GMM model with control variables. Both studies, despite their different methodologies and regional focuses, converge on a critical conclusion: efficient logistics systems, characterized by streamlined customs procedures, seamless goods movement, and reliable supply chains, directly translate into enhanced economic prosperity. This compelling evidence underscores the need for Vietnam, with its burgeoning economy and strategic location within Asian trade routes, to prioritize research exploring the specific impact of logistics performance on its own economic growth trajectory. Such a study would provide invaluable insights for policymakers, enabling them to leverage optimized logistics systems as a key driver of sustainable economic growth and unlock the nation's full economic potential. 2.3. The Direct Impact of Infrastructure on Economic Growth Banerjee et al. (2020) examined the influence of transportation infrastructure on economic development in China during the two decades following the country's trade liberalization and market reforms, a period of rapid GDP growth. Their findings present several key insights. Firstly, regions proximate to historical transportation networks show higher GDP per capita, greater income inequality, more firms, and higher average firm profits. However, these differences are relatively modest in magnitude. There is no evidence to suggest that proximity to transportation networks significantly impacted income growth during the studied period. The results do not contradict previous views, such as those of Fogel (1962, 1964) and Huang (2008), which argued against an overemphasis on transportation infrastructure during rapid growth phases. However, the findings also align with an alternative explanation that while infrastructure can provide substantial overall economic benefits, limited factor mobility may prevent these benefits from being concentrated in well-connected areas. The research underscores the importance of other factors, such as factor mobility, in determining the economic impact of infrastructure. Additionally, the paper emphasizes the need for reliable methods to estimate or bound the social returns on infrastructure investments, marking this as a crucial next step in the research agenda. These insights highlight that although transportation infrastructure can be beneficial, a comprehensive assessment of its impact on economic development requires careful consideration of other influencing factors. 3. Research Methodology 3.1. Model Specification This study employs the Autoregressive Distributed Lag (ARDL) model to investigate the dynamic relationships between infrastructure quality, logistics performance, and economic growth in Vietnam. The ARDL approach, developed by Pesaran and Shin (1995), offers several advantages for analyzing time series data, particularly in settings with a limited number of observations, as is often the case with macroeconomic variables (Nkoro & Uko, 2016). The ARDL model is preferred over other time series techniques for several reasons: • Flexibility in Handling Data Stationarity: Unlike traditional cointegration techniques, such as the Vector Autoregression (VAR) model, ARDL can be employed even when the variables are integrated of different orders, I(0) or I(1), or a mix of both (Pesaran, Shin, & Smith, 2001). This flexibility is particularly relevant for this study as macroeconomic variables often exhibit different orders of integration. • Estimation of Short-Run and Long-Run Relationships: The ARDL framework allows for the simultaneous estimation of both short-run and long- run relationships between variables, providing a comprehensive understanding of the dynamic adjustments (Pesaran & Shin, 1998). This is crucial for analyzing the impact of infrastructure investments on logistics performance and economic growth, as these effects may materialize over different time horizons. • Small Sample Size Performance: The ARDL approach is known for its robust performance even with limited sample sizes, making it suitable for this study, which utilizes data from 2007 onwards (Nkoro & Uko, 2016). 4. Research Hypothesis and Model Development 4.1. Hypotheses Development This study examines the relationships between infrastructure quality, logistics performance, and economic growth in Vietnam. Drawing upon established theoretical frameworks and empirical evidence, we formulate the following hypotheses: Hypothesis 1: Infrastructure quality has a positive and significant impact on logistics performance in Vietnam.
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