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Abstract

In this paper, we investigate the effect of physical capital on economic growth using sectoral data for Vietnam. A common problem with this topic is the nonexistence of capital data. Hence, we introduce a new method to obtain the coefficient of capital growth without the need to obtain capital data. The results show that the effects of capital growth on economic growth for the period 1990-2002 are higher than those of the period 2000-2010. We also find that the effects are very different for individual sectors in the economy. Based on these results, we offer theoretical and policy implications for capital growth and economic development in Vietnam.

Keywords

Capital Growth Estimation; Rate Of Return; Production Function.