The impact of structural transformation of industries on the GRDP growth of Hanoi city, Vietnam

Abstract

Industrial restructuring is considered one of the key drivers of long-term economic growth through the mechanism of resource
reallocation and improvement of average productivity. In the context of strong urbanization and service development in major economic centers,
assessing the impact of industrial restructuring at the local level is crucial for sustainable development policy planning. This study analyzes the
impact of industrial restructuring on Gross Domestic Product (GDP) growth in Hanoi during the period 2010-2024. Based on the theoretical
framework of structural restructuring and productivity growth, the study uses a time series quantitative method combined with a lagged
autoregression model to estimate the short-term and long-term impacts between variables. Empirical results show that industrial restructuring has
a positive and statistically significant impact on GDP growth in the area. Growth decomposition analysis reveals that Hanoi's growth is driven by
both intra-industry productivity enhancement and inter-industry resource reallocation, with intra-industry components accounting for a larger
proportion but reallocation still contributing significantly. The research results imply that the quality of structural transformation, particularly in
the process of service industrialization and industrial upgrading, plays a key role in the city's sustainable growth.