Provincial government spending on socio-cultural issues and tourism development in Vietnam

Thao  Duc Truong; Thanh  Duc Tran; Hai  Thi Nguyen; Phuong  Cam Bui

doi:10.23762/FSO_VOL10_NO2_1

Published : 2022-06-29

Vol. 10 No. 2 (2022)

Provincial government spending on socio-cultural issues and tourism development in Vietnam

Thao Duc Truong

https://orcid.org/0000-0003-1160-4312

Thanh Duc Tran

https://orcid.org/0000-0001-6935-0314

Hai Thi Nguyen

https://orcid.org/0000-0001-5201-7611

Phuong Cam Bui

https://orcid.org/0000-0001-9107-7334

DOI: https://doi.org/10.23762/FSO_VOL10_NO2_1

Abstract

While the relationship between government spending and economic development is well established, few have examined government investment in socio-cultural issues related to the development of local tourism. The gap in the literature and the importance of this topic have motivated the researchers to conduct this study. Given this fact, the main aim of the study is to examine how government spending on socio-cultural issues affected local tourism revenue in 63 provinces and cities in Vietnam over the period from 2010 to 2019. The study uses panel data for 63 provinces and cities, spanning from 2010 to 2019, and employs a generalised method of moments (GMM) estimator, which takes into account the issues with simultaneity, omitted unobserved time-invariant variables, and potential dynamic endogeneity in the econometric model. The study shows that for a one percentage point increase in local government spending on socio-cultural issues, revenue from local tourism increases by 0.676%, and overall revenue by 0.790%, 2.106%, and 0.355% in the northern, central, and southern regions of Vietnam respectively. The study helps to explain the mechanism whereby local government expenditure influences the development of tourism via (i) an increase in the number of returning tourists; and (ii) an increase in local tourism-related services and goods transactions, reflected in the number of goods transported across the locality.

Keywords:

local tourism development, government expenditure, GMM estimator

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Duc Truong, T. ., Duc Tran, T. ., Thi Nguyen, H. ., & Cam Bui, P. . (2022). Provincial government spending on socio-cultural issues and tourism development in Vietnam. Forum Scientiae Oeconomia, 10(2), 9–27. https://doi.org/10.23762/FSO_VOL10_NO2_1

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Thao Duc Truong

thaotd@dainam.edu.vn
https://orcid.org/0000-0003-1160-4312

Affiliation:

Dai Nam University, Hanoi Viet Nam

Bio Statement (e.g., department and rank)

Dr. Truong Duc Thao is a lecturer at Dai Nam University. His research interests include work motivation, firm performance, organisational behaviour, personal behaviour, and tourism development, among others. He has had several papers published in Finance Research Letters, Economic Studies, Uncertain Supply Chain Management, and the Academy of Strategic Management Journal.

Thanh Duc Tran

tranducthanh@siu.edu.vn
https://orcid.org/0000-0001-6935-0314

Affiliation:

Saigon International University, Ho Chi Viet Nam

Bio Statement (e.g., department and rank)

Associate Professor Tran Duc Thanh is a lecturer at Saigon International University. He received his PhD degree in tourism geography from Vietnam National University, Hanoi. His fields of interest are tourism geography, tourism planning, and sustainable tourism development.

Hai Thi Nguyen

thanhaidulich@yahoo.com
https://orcid.org/0000-0001-5201-7611

Affiliation:

VNU University of Science, Hanoi Viet Nam

Bio Statement (e.g., department and rank)

Nguyen Thi Hai is an associate professor in the Faculty of Geography at VNU-University of Science. She received her PhD degree in tourism geography from Vietnam National University, Hanoi. Her research interest includes tourism planning, tourism development and socio-economic geography.

Phuong Cam Bui

phuongbc@thanglong.edu.vn
https://orcid.org/0000-0001-9107-7334

Affiliation:

Thang Long University, Hanoi Viet Nam

Bio Statement (e.g., department and rank)

Dr. Bui Cam Phuong is a lecturer at Thang Long University. Her research interests include tourism development, sustainable tourism development, and firm performance. He has had several papers published in Finance Research Letters and Economic Studies.