Author(s): Ph?m Thanh Hung, Hoang Thi Thanh Hang
The paper evaluates the impact of state budget expenditure on local economic growth in Vietnam for the period from 2011 to 2018. Based on the research of Cooray and Alexiou in 2009, they evaluate the impact of state budget expenditure on local economic growth through Cobb-Douglas production function, including government capital. System GMM- SGMM model is applied to estimate the model with data obtained from 61 provinces and cities in Vietnam. The result shows that increasing state budget expenditure will enhance the local economic growth. Particularly, a 1% increase in state budget expenditure will increase local economic growth by 0.196%. Therefore, we impose some policy implications to improve the efficiency of local economic growth in Vietnam.