The impacts of public investment on return and economic growth by economic industry in Vietnam

Abstract

This study empirically analyses the impact of public investment from government budget on economic growth by measuring the indirect effects of public investment on return and private investment in 16 economic industries from 1990 to 2016. The findings show the positive relationship between private investment and return on total assets by industry. Economic growth, the share of public investment in infrastructure and the share of public investment in education also have a positive impact on return on total assets by industry. However, total state sector investment has the negative effect on the return on total assets by industry. In addition, when observing after tax profit by industry, there appears that the share of total investment in GDP is positively affected by the share of manufacturing industry in GDP and labour productivity by industry.