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Exploring the role of technology, tourism and financial development: an empirical study of Vietnam

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Abstract

Vietnam is one of the emerging and industrializing developing countries in East Asia that has experienced a growth in tourism, information and communications technology (ICT) and financial development over the last three decades largely supported by significant structural reforms to escalate its path towards modernization and industrialization by 2020. In this paper, we explore the short-run and long-run effects of tourism, ICT and financial development over the period 1980–2010. Further, we examine the causation between these contemporary drivers of growth. The results show tourism has a positive and statistically significant effect in the short-run whereas ICT and financial development have a momentous positive and significant effect in the long-run. The causality results show unidirectional causation from capital per worker, ICT and financial development to output per worker; from ICT and financial development to capital per worker; and from capital per worker to tourism. Further, we also note a bi-directional causation between tourism and output per worker indicating their mutually reinforcing effect in the economy.

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Notes

  1. Capital stock, \(K_{t}\), is defined as \(K_{t} = (1-\delta )K_{t-1} + I_{t}\), where \(\delta \) is the depreciation rate and \(I_{t}\) is the investment in constant US dollars. Labour stock is estimated from employment to population ratio. We used \(\delta = 0.08\); and initial \(K_{0}\) is set as 1.5 times the 1980 GDP in constant 2000 prices.

  2. The data on tourism receipts reported by the WorldBank (2012) was 2003–2010 periods. However, to ensure we have consistent data available for analysis, we used the growth of visitor arrival to estimate data for tourism receipts from 1980–2002.

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The author would like to sincerely thank the anonymous reviewers, the journal editor, and the Springer Correction Team for typesetting.

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  1. FBE Green House, School of Accounting & Finance, Faculty of Business & Economics, University of the South Pacific, Suva, Fiji

    Ronald Ravinesh Kumar

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Kumar, R.R. Exploring the role of technology, tourism and financial development: an empirical study of Vietnam. Qual Quant 48, 2881–2898 (2014). https://doi.org/10.1007/s11135-013-9930-5

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