USING FEM AND REM TO ASSESS THE IMPACT OF STRUCTURAL SHIFT ON ECONOMIC GROWTH OF THE NORTHERN COASTAL PROVINCES

Abstract

Gross regional domestic product (GRDP) is an economic indicator that has a close relationship with the economic structure of that locality. This study aims to evaluate the impact of structural changes on changes in GRDP based on quantitative research methods using panel data regression models with fixed effects (FEM) and random effects (REM). Panel data source that the author collected on 5 Northern coastal provinces: Hai Phong, Thai Binh, Ninh Binh, Nam Dinh and Quang Ninh with the variables GRDP, total investment capital (K), total number of workers in the area (L), the proportion of agriculture in the GRDP structure (AGRI), the rate of poor households in the area (POV), trade openness (OPEN) and average electricity consumption (ELEC). The research results show that the REM model is suitable in assessing the mentioned impacts and variables that have a prominent influence on the local economy, such as electricity consumption, total investment capital, poor households, the proportion of agriculture with the level of importance gradually decreases accordingly.