Trade Openness and Economic Growth in Ho Chi Minh City, Vietnam: Evidence from an Extended Solow ARDL Approach

This study analyzes the relationship between trade openness, FDI, and economic growth in Ho Chi Minh City within the framework of an extended Solow model, using annual time series data from 2000 to 2024, and provides empirical evidence at the municipal level for Vietnam's leading economic and integration center. The trade open-ness is separated into the ratio of exports and imports to GRDP to reflect the different impacts of economic integra-tion. The ARDL and ECM model are applied in order to instantaneously analyze both short-term and long-term ef-fects. The results show that the variables have mixed integration orders. Capital is the factor with the most positive and stable impact in the long term. Meanwhile, relative exports and FDI have a positive impact in the short term but a negative one in the long term, implying that the benefits of integration depend on the quality of international trade, the ability to absorb technology, and domestic linkages. The negative and statistically significant error correc-tion coefficient indicates the existence of an adjustment mechanism toward equilibrium. The robustness check with the COVID-19 dummy variable approves the stability of the main results. The study points out that the necessity of changing from extensive quantitative integration to enhance the quality of growth and the efficiency of resource allocation.