International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

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 Volume 13, Issue 7 (July 2026), Pages: 201-210

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 Original Research Paper

The complementary roles of digital transformation and human capital in provincial economic growth: Evidence from Vietnam

 Author(s): 

Hoa Thi Ho 1, Binh Quang Bui 2, *, Nang Thi Do 1

 Affiliation(s):

1Faculty of Business Administration, Academy of Finance, Hanoi, Vietnam
2Faculty of Economics, The University of Danang, Danang, Vietnam

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 * Corresponding Author. 

   Corresponding author's ORCID profile:  https://orcid.org/0009-0000-3644-9887

 Digital Object Identifier (DOI)

 
https://doi.org/10.21833/ijaas.2026.07.019

 Abstract

This study examines the complementary roles of digital transformation, human capital, and institutional quality in shaping provincial economic growth in Vietnam. Using a balanced panel dataset of 26 provinces over the period 2009–2024, the analysis employs a panel ARDL framework with pooled mean group (PMG) and dynamic fixed effects (DFE) estimators to distinguish between short-run dynamics and long-run relationships. The results show that digital transformation does not have a statistically significant direct effect on economic growth in the long run. However, positive short-run effects are observed, indicating transitional gains during periods of ICT expansion. In contrast, human capital and institutional quality exhibit robust long-run effects on economic growth. More importantly, interaction models reveal that the growth impact of digital transformation depends on sufficient human capital and effective institutions. Provinces with weak skill bases or poor governance fail to translate ICT investment into sustained growth. Additional heterogeneity analysis across provinces with different initial levels of digital development confirms that neither digital transformation nor human capital alone generates stable growth effects. Instead, their joint presence is necessary for long-term productivity gains. This study provides novel provincial-level evidence from Vietnam showing that digital transformation has no independent long-run growth effect. Instead, its impact is conditional on human capital and institutional quality. By integrating interaction models within a panel ARDL framework, the paper clarifies why ICT-led growth remains uneven across regions.

 © 2026 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords

Digital transformation, Human capital, Institutional quality, Economic growth, Panel ARDL

 Article history

Received 17 March 2026, Received in revised form 3 July 2026, Accepted 28 July 2026

 Acknowledgment

The authors would like to express their sincere gratitude to the Academy of Finance (Vietnam) for its support and assistance in facilitating this study. 

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

Ho HT, Bui BQ, and Do NT (2026). The complementary roles of digital transformation and human capital in provincial economic growth: Evidence from Vietnam. International Journal of Advanced and Applied Sciences, 13(7): 201-210

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