Time-varying interrelations between digitalization and human capital in Vietnam

Abstract

In this study, we use a time-varying parameter vector autoregression in conjunction with the extended joint connectedness approach (TVPVAR-EJC) to examine the interrelationships among five variables, namely digitalization measured by the number of individuals using the Internet (% of the population), mobile cellular subscriptions (per 100 people), human capital index, CO2 emissions, and GDP, from 1996 to 2019 in Vietnam. Net total directional connectedness of digitalization and other variables suggests that it consistently acts as a net shock transmitter, whereas human capital was found to be a net receiver of corresponding shocks from 1997 to 2019. The emission of CO2 was a net critical receiver in 1998 but remained as a net transmitter for the rest of the period. Pairwise connectedness reveals that digitalization appeared as a net shock transmitter in connection with the human capital index and GDP. In the relationship with human capital, digitalization’s role was critical.