Determinants of Digital Economy Development in Viet Nam: A Spatial Panel Analysis of Cross-Provincial Spillovers

This paper investigates the determinants of the uneven development of the digital economy across the 63 provinces of Viet Nam from 2020 to 2025. Since a province’s digital economy is shaped not only by its own characteristics but also by those of its neighbors, we use spatial econometric models that explicitly allow for these cross-provincial linkages. Statistical tests confirm that these spatial linkages are a genuine and important feature of provincial digital economy outcomes. We find that human capital is the only factor with a robust and economically meaningful influence: A better-trained workforce raises a province’s own digital economy but tends to draw activity away from its neighbors. Foreign direct investment, digital infrastructure, institutional quality, and cybersecurity show no statistically significant effect once these spatial linkages and province-specific differences are considered. Ultimately, the results suggest that regionally coordinated strategies are more effective than individual provincial competition in promoting digital economy development.