Tác động của chi tiêu công, quản trị công đến tăng trưởng kinh tế tại các quốc gia châu á tt tiếng anh

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HO CHI MINH CITY LE HOANG ANH THE IMPACT OF PUBLIC EXPENDITURE, GOVERNANCE ON ECONOMIC GROWTH IN ASIAN COUNTRIES SUMMARY OF PHD THESIS HO CHI MINH CITY - 2019 MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HO CHI MINH CITY LE HOANG ANH THE IMPACT OF PUBLIC EXPENDITURE, GOVERNANCE ON ECONOMIC GROWTH IN ASIAN COUNTRIES SUMMARY OF PHD THESIS Major: Finance – Banking Code: 9.34.02.01 Scientific instructor: Assoc Prof., Dr Nguyen Ngoc Thach HO CHI MINH CITY - 2019 CHAPTER 1: INTRODUCTION 1.1 The urgency of the thesis Economic growth is the top concern of all countries in the world The relationship between economic growth and economic development and social progress is indisputable However, the sources, factors and mechanisms (based mainly on market or state intervention) of economic growth are a matter of much debate The history of economic theories, despite recognizing the advantages of a free market economy system before a centrally planned economy, still recognizes that the free market economic system cannot solve it Many problems or solve them with low efficiency These are called market fiasco Therefore, there is a need for government intervention in the market to ensure the goal of economic growth (Keynes, 1936) In particular, public expenditure is an important tool of fiscal policy, demonstrating the active impact of the state on the economy Theoretically, over the past decades, the effects of public expenditure on economic growth have been conducted by many domestic and foreign studies (Alexiou, 2009; England, 2008; Gemmell, Kneller, & Sanz, 2014; Malek, 2014; Thon, Huong, & Thuy, 2010; Yasin, 2000) The results of studies show that, in most countries, public expenditure is used as a tool of fiscal policy but its impact on economic growth is still a controversial issue The first two theories on the relationship between public expenditure and economic growth are Wagner's theory and Keynes's theory Wagner's theory (1883) argues that a causal relationship exists between public expenditure and national income However, Wagner's theory (1883) holds that public spending is not the cause of economic development, but rather an endogenous variable of economic growth Specifically, the increase in economic growth is the cause of the increase in public spending Contrary to Wagner's law theory (1883), Keynes's (1936) theory argued that an increase in public spending would have a positive effect on economic growth As such, public spending is an exogenous force driving economic growth (Loizides & Vamvoukas, 2005) Economists who support Keynes's theory that proactive fiscal policy is an important tool available to governments to promote economic growth (Shafuda, 2015) In addition to these two theories, Solow (1956) in the Neoclassical growth model argues that there is no long-term effect of public spending on economic growth Neoclassical growth models indicate that fiscal policies cannot bring about long-term changes in economic growth Neoclassical economists attribute the long-term economic growth to population growth, labor force growth, technological progress and these variables identified as exogenous Contrary to the above results, Barro (1989) in the endogenous growth model argues that public spending has a negative effect on economic growth Barro (1989) explains that government public spending can overwhelm private investment, but does not provide a stimulus to offset investment and growth Thus, some studies suggest that public spending has a positive effect on economic growth Others argue that public spending has a negative or no effect on economic growth More specifically, the impact of public spending on economic growth can be nonlinear, i.e increasing public spending will promote economic growth but when public spending exceeds a certain threshold, economic growth There are signs of a gradual decrease in the health rate (Malek, 2014) Practically, public spending also has different effects on economic growth In developing countries such as Asia, the scale of public spending tends to increase over the years, reflecting the increasing demand for public services such as education, public health care or small scale infrastructure (IMF, 2014) This upward trend began in the mid-1990s, increasing in both public spending and public investment In particular, during the 2008-2009 crisis, public spending increased sharply in most developing countries As Gemmell et al (2014) stated, fiscal stimulus packages, which significantly expanded the various public expenditure programs, were issued in many countries from 2008 onwards to combat the economic crisis global Although public spending is always high, the efficiency of public spending in developing countries is very worrying (Cavallo & Daude, 2011; Gupta et al., 2014) According to research by Gupta et al (2014), each public expenditure unit in developing countries produces only half of the corresponding material value Thus, both the theoretical and practical contexts show the inconsistent effect of public spending on economic growth Therefore, in this study, the author aims to re-evaluate the impact of public spending on economic growth so that conclusions can be drawn in accordance with the conditions of Asian countries In addition, in order to obtain more comprehensive evidence, the author also examines the nonlinear impact of public spending on economic growth Empirical studies conducted in different countries and regions on macroeconomic conditions have shown that public spending has a different effect on economic growth However, the study of Zhuang et al (2010) shows that public spending has a positive effect on economic growth in some countries but has a negative impact on other countries with the same macroeconomic conditions This result can be explained by political characteristics and institutional quality (aspects of public governance) Political specific factors and institutional quality have affected a nation's ability to effectively implement fiscal policy (Brahmbhatt & Canuto, 2012) By the early 1990s, the issue of public administration and its impact on economic growth began to be discussed in international debates International organizations argue that public spending on public goods and services will not achieve the desired effect of economic growth if budget construction, implementation and monitoring fail , 1992) This proposal shows that public governance plays an important role in the impact of public spending on economic growth Recent studies have shown that factors of public governance may have created a change in the impact of public spending on economic growth For example, one of the elements of public governance considered by recent studies is corruption Studies have suggested that corruption has a negative effect on the nation's economic growth (Glaeser & Saks, 2004; Xu, Li, & Zou, 2000) In particular, the study of dAgostino et al (2016) shows that under the influence of corruption, public spending on defense has a negative impact on the economic growth of 106 countries in the sample Although there is evidence that public governance plays a role as a catalyst, better and more effective control of the use of public spending can thus promote economic growth or reduce the positive impact of spending Public spending on growth in a low-quality institutional environment has not been studied in a comprehensive manner on the constituent elements of public governance affecting this impact In addition, several recent studies have looked at the individual effects of public governance on economic growth but the measures have not been consistent (Siddiqui & Ahmed, 2013) Most of the previous studies measuring public governance were based on two sets of indicators, the Worldwide Governance Indicators (WGI) and the International Country Risk Guide (ICRG) Although these two indicators are heavily used in empirical studies to measure public administration quality and depending on the research conditions that researchers can choose either WGI or ICRG, recent studies have shown Some inadequacies in these indicators Specifically, the studies of Knoll & Zloczysti (2012), Langbein & Knack (2010) have shown evidence of overlapping of groups of indicators that make up these two sets of indicators At the same time, some of the two indicators are difficult to separate This implies that some of the two indicators can measure the same concept That is why some other empirical studies such as Al-Marhubi (2004), Bjørnskov (2006), Easterly & Levine (2002) have averaged all six WGI indices in their analysis However, according to Siddiqui & Ahmed (2013), this average does not accurately describe the quality of public administration Stemming from the above methodological considerations, in considering the impact of public administration on the relationship between public spending and economic growth, to address the inadequacies when using governance measures As mentioned above, this study uses Exploratory Factor Analysis (EFA) based on the two sets of indicators WGI and ICRG, in order to identify representative measurement elements of governance work This method can help group indicators together measure a concept to form a representative factor These representations will be separate from each other By doing this, the author will overcome the overlap of the indicators groups that constitute the two sets of WGI and ICRG indicators to form factors that really represent public governance Finally, the author uses public governance measures to find evidence of the impact of public administration on the relationship between public spending and economic growth in Asian countries 1.2 Objectives of the study The overall goal of the study is to assess the impact of public expenditure, governance on economic growth in Asian countries On that basis, propose some suitable policy implications To achieve the overall goal, the study has the following specific objectives: - Assess the impact of public expenditure on economic growth in Asian countries - Assess the impact of governance on economic growth in Asian countries - Assess the impact of governance on the relationship between public expenditure and economic growth in Asian countries 1.3 Research questions To achieve the above research objectives, the thesis answers the following questions: - What is the impact of public expenditure on economic growth in Asian countries? - What is the impact of governance on economic growth in Asian countries? - What is the impact of governance on the relationship between public expenditure and economic growth in Asian countries? 1.4 Research participants and the scope of the study Research participants: The impact of public expenditure, governance on economic growth in Asian countries In the content of this thesis, the author approaches governance from the perspective of managing public expenditure activities Research scope: The study was conducted in 43 Asian countries Countries were selected based on the availability of data for the variables in the research model The selected countries include 11 high-income countries and 30 middle-income countries and low-income countries according to the World Bank's income classification According to statistics of the Asian Development Bank (ADB), Asia includes 50 countries However, some countries not have observable data, so the study was conducted with 43 countries, accounting for 86% of Asian countries Therefore, the sample is still representative Duration of the study: The study was conducted during 2004 - 2017 This period was chosen because most countries have data available On the other hand, this period also includes the period of world economic crisis of 2008-2009 This stage was selected by the author to conduct research for a variety of reasons Firstly, this period ensures that 43 countries have sufficient data to conduct the study Secondly, this research phase includes the pre-crisis period 2004-2007, the crisis period 20082009, post-crisis period 2010-2017 Therefore, the author can consider the overall impact of Public spending, public administration to economic growth in Asian countries under normal and specific conditions 1.5 Research Methods In order to achieve the set research objectives, the thesis uses appropriate estimation methods to explore the impact of public expenditure, governance on economic growth in Asian countries Specifically: In order to explore the impact of public expenditure on economic growth in Asian countries, the author developed the model from the research of Alexiou (2009), Cooray (2009) To overcome the variance, autocorrelation and especially endogenous phenomena that often occur in macroeconomic models, the author uses the difference GMM method proposed by Arellano & Bond (1991) In order to explore the factors representing the components of governance in Asian countries, the author uses the Exploratory Factor Analysis (EFA) method with two sets of governance indicators as Worldwide Governance Indicators (WGI) and the International Country Risk Guide (ICRG) To assess the impact of governance on economic growth in Asian countries, the author develops a model from the research of Siddiqui & Ahmed (2013) The difference GMM method proposed by Arellano & Bond (1991) continues to be used to estimate models To assess the impact of governance on the relationship between public expenditure and economic growth in Asian countries, the author continues to develop the model from the studies of Alexiou (2009), Cooray (2009) ), Siddiqui & Ahmed (2013) The difference GMM method proposed by Arellano & Bond (1991) continues to be used to estimate models In addition, the author also uses traditional qualitative methods such as content analysis, statistical description, analysis and synthesis, induction and deduction, generalization These methods aim at analyzing phenomena separately and then combining them at a new level, summarizing specific facts into general conclusions, and proving assumptions by facts and data 1.6 New contributions of the thesis The thesis focuses on specific objectives including: (1) Assessing the impact of public expenditure on economic growth in Asian countries; (2) Assessing the impact of governance on economic growth in Asian countries; (3) Assessing the impact of governance on the relationship between public expenditure and economic growth in Asian countries Compared with the previous studies, the thesis has made the following new contributions: Based on data from 43 Asian countries during 2004-2017, the author assessed the impact of public expenditure on economic growth The results show that public expenditure has a negative impact on economic growth In addition, the study found no evidence of the nonlinear impact of public expenditure on economic growth In addition, most of the previous studies usually only measure the impact of public expenditure on economic growth without considering the factors that change this impact Unlike previous studies, the thesis considers the impact of governance on the relationship between public expenditure and economic growth The results show that, in countries with good governance quality, public expenditure has a positive impact on economic growth The results of the thesis have contributed to empirical evidence for Wagner's law theory (1883), Keynes's theory of the impact of public expenditure on economic growth At the same time, the results of the thesis provide additional empirical evidence to support the theories of public choice, political and economic theory, institutional economic theory when showing the positive impact of governance on economic growth and the role of governance in the relationship between public expanditure and economic growth In addition, a new contribution of the thesis is made through governance measurement Specifically, most of the previous studies measuring governance were based on the two sets of indicators, the Worldwide Governance Indicators (WGI) and the International Country Risk Guide (ICRG) Although these two sets of indicators are heavily used in empirical studies to measure governance quality, recent studies have shown some limitations in these indicators Specifically, the studies of Knoll & Zloczysti (2012), Langbein & Knack (2010) have shown evidence of overlapping of groups of indicators that make up these two sets of indicators At the same time, some of the two sets of indicators are difficult to separate This implies that some of the two sets of indicators can measure the same concept Different from previous studies, in order to solve the limitations when using the above sets of governance measurement indicators, this study uses Exploratory Factor Analysis (EFA) to identify factors that measure governance quality This method can help group indicators together measure a concept to form a representative factor These representations will be separate from each other Factors representing public governance will then be used to assess the impact on the relationship between public spending and economic growth in Asian countries through estimating models using the DGMM method proposed by Arellano & Bond (1991) This method is commonly used in linear dynamic panel data estimates to overcome endogenous phenomena that often occur in macroeconomic models Therefore, the results obtained ensure the reliability to conclude AR (1) pvalue AR (2) pvalue Hansen pvalue Number of groups Number of instruments 0.018 0.227 0.240 43 41 Second stage F-test 0.000 p-value The results of estimating the model of the impact of public expenditure on economic growth in Asian countries are implemented with DGMM method The growth dependent variable represents economic growth The independent variable ICRG represents governance AR (1), AR (2) p-value is the p-value of the first and second degree correlation test of residuals Hansen p-value is the p-value of Hansen test on the suitability of the tool variables in the model The second stage F-test p-value is the p-value of the F-test for model suitability *** statistically significant at 1% ** statistically significant at the 5% level * statistically significant at 10% Source: Calculation results from STATA 15.0 software Table 4.15 Model estimation results with independent variable WGI growth Regression Standard error t P>t -0.2138788*** 0.0169892 -12.59 0.000 WGI 0.2838852*** 0.0289746 9.80 0.000 inf -0.233335*** 0.037514 -6.22 0.000 inv 0.1300402*** 0.0242235 5.37 0.000 l 0.6693585*** 0.2154946 3.11 0.003 open 0.0715411*** 0.0092481 7.74 0.000 coefficient lngdp L1 AR (1) pvalue AR (2) pvalue Hansen pvalue Number of groups Number of instruments 0.029 0.397 0.150 43 29 Second stage F-test 0.000 p-value The results of estimating the model of the impact of public expenditure on economic growth in Asian countries are implemented with DGMM method The growth dependent variable represents economic growth The independent variable WGI represents governance AR (1), AR (2) p-value is the p-value of the first and second degree correlation test of residuals Hansen p-value is the p-value of Hansen test on the suitability of the tool variables in the model The second stage F-test p-value is the p-value of the F-test for model suitability *** statistically significant at 1% ** statistically significant at the 5% level * statistically significant at 10% Source: Calculation results from STATA 15.0 software Table 4.16 Model estimation results with independent variable PV growth Regression Standard error t P>t -0.2098379*** 0.0100581 -20.86 0.000 PV 0.1656545*** 0.0340819 4.86 0.000 inf -0.1791834*** 0.0091754 -19.53 0.000 inv 0.0359533*** 0.0064581 5.57 0.000 0.889855*** 0.1268264 7.02 0.000 0.0396959*** 0.003613 10.99 0.000 coefficient lngdp L1 l open AR (1) pvalue AR (2) pvalue Hansen pvalue Number of groups 0.032 0.372 0.965 43 Number of instruments 65 Second stage F-test 0.000 p-value The results of estimating the model of the impact of public expenditure on economic growth in Asian countries are implemented with DGMM method The growth dependent variable represents economic growth The independent variable PV represents governance AR (1), AR (2) p-value is the p-value of the first and second degree correlation test of residuals Hansen p-value is the p-value of Hansen test on the suitability of the tool variables in the model The second stage F-test p-value is the p-value of the F-test for model suitability *** statistically significant at 1% ** statistically significant at the 5% level * statistically significant at 10% Source: Calculation results from STATA 15.0 software Table 4.17 Model estimation results with all independent variables ICRG, WGI, and PV growth Regression Standard error t P>t -0.2632818*** 0.014641 -17.98 0.000 ICRG 0.3260855*** 0.0826844 3.94 0.000 WGI 0.8941211*** 0.1015318 8.81 0.000 PV 1.255519*** 0.1533881 8.19 0.000 inf -0.2083819*** 0.026469 -7.87 0.000 inv 0.1439332*** 0.0255215 5.64 0.000 coefficient lngdp L1 l open AR (1) pvalue AR (2) pvalue Hansen pvalue Number of groups Number of instruments 0.0004153 0.1336131 0.00 0.998 0.0581623*** 0.0148619 3.91 0.000 0.006 0.129 0.447 43 42 Second stage F-test 0.000 p-value The results of estimating the model of the impact of public expenditure on economic growth in Asian countries are implemented with DGMM method The growth dependent variable represents economic growth The independent variables ICRG, WGI, PV represent governance AR (1), AR (2) p-value is the p-value of the first and second degree correlation test of residuals Hansen p-value is the p-value of Hansen test on the suitability of the tool variables in the model The second stage F-test pvalue is the p-value of the F-test for model suitability *** statistically significant at 1% ** statistically significant at the 5% level * statistically significant at 10% Source: Calculation results from STATA 15.0 software Table 4.18 Summary of the impact of governance on economic growth in Asian countries growth Model ICRG 0.0197994*** WGI Model Model Model 0.3260855*** 0.2838852*** PV 0.8941211*** 0.1656545*** 1.255519*** *** statistically significant at 1% ** statistically significant at the 5% level * statistically significant at 10% 4.2.5 Results of assessing the impact of governance on the relationship between public expenditure and economic growth in Asian countries: Table 4.19 Model estimation results growth (1) gxICRG 0.429285*** gxWGI (2) (3) 0.3142587*** gxPV 0.5242011*** lngdp L1 -0.2312536*** -0.1889489*** -0.2572264*** inf -0.1443024*** -0.3555212*** -0.1737879*** inv 0.1345246*** 0.0869879*** -0.3987616*** l 0.5387102*** 0.2168633*** 0.9290704*** open 0.0584505*** 0.0878727*** 0.1309226*** AR (1) p-value 0.029 0.015 0.022 AR (2) p-value 0.729 0.583 0.848 Hansen p-value 0.265 0.292 0.198 43 43 43 41 43 38 0.000 0.000 0.000 Number of groups Number of instruments Second stage Ftest p-value The results of estimating the model of the impact of governance on the relationship between public expenditure and economic growth in Asian countries are implemented with the DGMM method The growth dependent variable represents economic growth The independent variables ICRG, WGI, PV represent governance AR (1), AR (2) p-value is the p-value of the first and second degree correlation test of residuals Hansen p-value is the p-value of Hansen test on the suitability of the tool variables in the model The second stage F-test p-value is the p-value of the F-test for model suitability *** statistically significant at 1% ** statistically significant at the 5% level * statistically significant at 10% Source: Calculation results from STATA 15.0 software 4.2.6 The robustness of the model Table 4.20 Results of testing the robustness of public expenditure on economic growth in Asian countries Source: Calculation results from software R 3.5.2 Table 4.21 Results of testing the robustness of public expenditure, governance and economic growth in Asian countries Source: Calculation results from software R 3.5.2 CHAPTER 5: CONCLUSION AND POLICY IMPLICATIONS 5.1 Conclusion The thesis has 03 research objectives: firstly, assess the impact of public expenditure on economic growth in Asian countries; secondly, assess the impact of governance on economic growth in Asian countries; Thirdly, assess the impact of governance on the relationship between public expenditure and economic growth in Asian countries With the first research objective to assess the impact of public expenditure on economic growth in Asian countries, the author has examined Wagner's theory (1883) and Keynes's theory (1936) as well as the models of Barro (1990), Devarajan et al (1996), Davoodi & Zou (1998) In addition to presenting the theoretical basis, the author also conducts research on domestic and foreign studies related to the impact of public expenditure on economic growth The research model was inserted by the author based on the analysis of studies of Alexiou (2009), Cooray (2009) The nonlinear impact of public expenditure on economic growth is examined by the author on the basis of Malek (2014) The study also conducted an assessment of the impact of public expenditure on economic growth under normal and crisis conditions through the introduction of a crisis dummy variable model that received a value of in the crisis period 2008 - 2009 and get a value of in the remaining years Based on the results of previous studies, the author uses panel data when performing the study In estimating the research models, the author uses the difference GMM (DGMM) method To ensure the reliability of estimates before discussing results, the author also conducted the necessary tests Specifically, the research models estimated by DGMM method all have a p-value of AR test (1) which is less than 5% significant and have a p-value of AR test (2) larger than 5% significant Therefore, all models have first-order autocorrelation but no second-order autocorrelation of residuals At the same time, the Hansen test of all models has a pvalue of 5% greater than the significance level, that is, the tool variables used in the models are appropriate On the other hand, the p-value of the F-test is also 5% smaller than the significance level, indicating that the models are suitable Also, another constraint when using the DGMM method is also satisfied that the number of instrument variables does not exceed the number of observation groups in all models The model estimation results show that, in Asian countries, the increase in public expenditure will cause negative effects on economic growth This result is consistent with the studies of Barro (1990) and Nurudeen & Usman (2010) The reason for this may be that an increase in public expenditure will lead to an increase in taxes and \ or an increase in foreign borrowing to finance public expenditure Also, weak governance is one of the reasons for inefficient public expenditures And this will curb economic growth On the other hand, the research results also show that public expenditure has no nonlinear impact on economic growth The estimation results of the research models also show the clear impact of the financial crisis on economic growth in Asian countries Even in times of financial crisis, the increase in public expenditure will cause more negative effects on the economy In addition to the results of the impact of public expenditure on economic growth shown above The study also found the effects of GDP per capita in the previous period, inflation rate, the ratio of private investment to GDP, the ratio of the labour force, and trade openness to economic growth in other countries The second research objective is to assess the impact of governance on economic growth in Asian countries First, the author identifies the factors that represent the components of governance in Asian countries In addition to presenting the theoretical basis, the author also conducts a review of related domestic and foreign studies To identify the factors representing governance, in this study, the author used EFA through SPSS 22.0 software The results of the EFA extracted three factors that represent governance based on two sets of governance, the Worldwide Governance Indicators (WGI) and the International Country Risk Guide (ICRG) Specifically: Factor 1: includes the observed variables VAWGI, GEWGI, RLWGI, RQWGI, CCWGI Name this factor WGI, which represents the observed variables: Voice and Accountability, Government Effectiveness, Regulatory Quality, The rule of law, Control of Corruption, is part of the WGI Factor 2: includes observed variables VAICRG, GEICRG, RLICRG, RQICRG, CCICRG Name this factor ICRG, which represents the observed variables: Voice and Accountability, Government Effectiveness, Regulatory Quality, The rule of law, Control of Corruption is part of the ICRG Factor 3: including observed variables is PVICRG, PVWGI Name this factor PV, which represents Political stability and Absence of Violence In addition to identifying factors that represent the components of governance, the author also conducts a review of the state of governance in Asian countries based on three identified factors To assess the impact of governance on economic growth in Asian countries, the author continues to use three extracted factors to assess the impact on economic growth This model of impact study was developed by the author based on a combination of growth theories proposed by Solow (1956), Romer (1986) and Lucas (1988) The variables representing governance were modeled by the author based on recent empirical research by Siddiqui & Ahmed (2013) Based on the results of previous studies, the author uses panel data when performing the study In estimating the research models, the author uses the differential GMM (DGMM) method To ensure the reliability of estimates before discussing results, the author also conducted the necessary tests Specifically, the research models estimated by DGMM method all have a p-value of AR test (1) which is less than 5% significant and have a p-value of AR test (2) 5% larger than significant Therefore, all models have first-order autocorrelation but no second-order autocorrelation of residuals At the same time, the Hansen test of all models has a pvalue of 5% greater than the significance level, that is, the tool variables used in the models are appropriate On the other hand, the p-value of the F-test is also 5% smaller than the significance level, indicating that the models are suitable In addition, another constraint when using the DGMM method is also satisfied that the number of instrument variables does not exceed the number of observation groups in all models The model estimation results show that, in Asian countries, the increase in the quality of governance will have a positive impact on economic growth The research results also show that ensuring a stable and non-violent politics will have a major impact on promoting economic growth in Asian countries In particular, ensuring stable and non-violent politics will help all economic sectors work better, thereby contributing to the development of the economy In addition, Political Stability and Non-Violence are also foundations for improving other criteria including Voice and Accountability, Government Effectiveness, Regulatory Quality, the rule of law, Control of Corruption With the third research objective of assessing the impact of governance on the relationship between public expenditure and economic growth in Asian countries, the author put into the model the interaction variables between governance and public expenditure In particular, the public expenditure variable is considered in the overall aspect and the main components of public expenditure Governance is represented by the ICRG, WGI, and PV variables obtained from the EFA through SPSS 22.0 software The results of the EFA extracted three factors that represent governance based on two sets of governance metrics, the Worldwide Governance Indicators (WGI) and the International Country Risk Guide (ICRG) The three factors extracted are used by the author to assess the impact of governance on the relationship between public expenditure and economic growth in Asian countries The research models continue to be used by the author to use the DGMM to estimate To ensure the reliability of estimates before discussing results, the author also conducted the necessary tests Specifically, the research models estimated by DGMM method all have a p-value of AR test (1) which is less than 5% significant and have a p-value of AR test (2) 5% larger than significant Therefore, all models have first-order autocorrelation but no second-order autocorrelation of residuals At the same time, the Hansen test of all models has a p-value of 5% greater than the significance level, that is, the tool variables used in the models are appropriate On the other hand, the p-value of the F-test is also 5% smaller than the significance level, indicating that the models are suitable In addition, another constraint when using the DGMM method is also satisfied that the number of instrument variables does not exceed the number of observation groups in all models The model estimation results show that, in Asian countries, under good governance, the increase in public expenditure will have a positive impact on economic growth This result is also consistent with all three variables representing governance: ICRG, WGI, and PV Thus, it can be seen that if Asian countries merely increased public expenditure, they could not promote economic growth In order for public expenditure to be effective, countries need to attach great importance to good governance In addition to estimating the models using DGMM method, to ensure the stability of the model and the conclusions drawn from the estimation results are not affected, the author continues to use Bayesian Model Averaging analysis to retest the regression coefficients Test results have estimated many models with different independent variables and all show the convergence of the sign of regression coefficients Thus, the conclusions drawn from the model ensure reliability 5.2 Policy implications Based on the research results outlined in the previous section, the policy implications proposed by the author towards the solution groups are: - Improve the quality of governance to achieve the goal of economic growth - Improve the quality of governance for public expenditure activities 5.3 Limitations and further research directions Although the research objectives have been achieved, the author recognizes that this research is still limited and needs to be supplemented and improved in the future First, although the study collected data with a sample of 43 Asian countries over a relatively long period from 2004 to 2017, the sample was not really large enough This limits the conclusions that can be drawn from the estimation results as well as affects the reliability of the test Further research needs to improve the data collection process, thereby improving both the quality and quantity of data Second, in addition to the variables analyzed in the models shown above, the theory of economic growth is also influenced by other margins Therefore, further studies should be based on specific research objectives to add other variables Thirdly, dividing the research sample into groups of countries with different political institutions and economic development levels also affects the research results Subsequent studies can make a sample of countries based on political institutions and the level of economic development Fourthly, although the identification of the crisis period in Asian countries is authored based on the studies of Filardo (2011) and Keat (2009), the impact of the crisis on the economy of each country There will be different lags and the extent of the impact on the countries in the sample is not the same This also limits some of the author's conclusions The following studies need more specific testing to accurately identify crisis periods in Asian countries ...MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HO CHI MINH CITY LE HOANG ANH THE IMPACT OF PUBLIC EXPENDITURE, GOVERNANCE ON ECONOMIC GROWTH IN ASIAN COUNTRIES... development goals: institutional-political and fiscal binding roles Source: Brahmbhatt & Canuto (2012) As Brahmbhatt & Canuto (2012) explains, the impact of public expenditure on economic growth... formulated the corresponding research methods to achieve these goals As follows: 3.2.1 Methods to assess the impact of public expenditure on economic growth To achieve the first research goal, the author