The impact of industrial restructuring on Lao Cai’s economic growth

Abstract

In the context of global economic integration and the ongoing structural transformation of industries across many countries, this study analyses the impact of industrial restructuring on economic growth in Lao Cai province using the vector autoregression (VAR) model. Drawing on statistical data from 1995 to 2023, the findings reveal that industrial restructuring begins to exert a clear effect on Lao Cai’s economic growth from the second year onwards. Among the three economic sectors, the service sector plays a dominant role, with its influence peaking in the third and fourth years before stabilising from the fifth year. The industry-construction and agriculture-forestry-fishery sectors also have certain impacts, although their magnitudes remain relatively modest. The VAR model proves appropriate and statistically reliable in capturing the endogenous relationships among economic sectors. The findings provide an important scientific basis for local economic policy formulation, while also recommending appropriate adjustments to the industrial structure to promote sustainable growth in Lao Cai. The study further recommends implementing proactive structural adjustments that prioritise the development of the service sector, the integration of modern agricultural practices, and the optimisation of industrial growth in order to achieve long-term, sustainable economic development tailored to Lao Cai’s unique conditions.