Promoting or hindering: the relationship between industrialization, urbanization, and human development in Vietnam

Background: Human beings are the ultimate beneficiaries of the achievements of economic activities.This study employs Wavelet analysis to investigate the relationship between industrialization, urbanization, and human development, measured by the Human Development Index (HDI, in Vietnam across both the time and frequency domains over the period 1986-2023.The results of the Wavelet Coherence analysis show that industrialization is strongly correlated with HDI at high-frequency scales, while the correlation becomes stronger at low-frequency scales, indicating a stronger long-run relationship, whereas urbanization exhibits a strong correlation across all time-frequency domains.The Partial Wavelet Coherence (PWC) analysis indicates that urbanization has a negligible effect on the relationship between HDI and industrialization, while the inclusion of industrialization strengthens the relationship between HDI and urbanization.The Multiple Wavelet Coherence (MWC) analysis further reveals that the relationship among HDI, industrialization, and urbanization is complementary.These insights into the interactions among the three variables across the time and frequency domains contribute to the theoretical foundation and provide empirical evidence for economic policymaking.