In the context of the Fourth Industrial Revolution, digital transformation plays a crucial role in economic growth, particularly in developing countries such as Vietnam. This study examines the impact of digital transformation on provincial economic growth using a balanced panel dataset of 63 provinces and cities in Vietnam from 2012 to 2022. The system GMM approach is estimated to address endogeneity and capture the dynamic nature of the model. The analysis focuses on the overall ICT index, including infrastructure, human resources, and readiness, as well as the interaction between ICT and the Provincial Competitiveness Index (PCI) in explaining local economic performance. The empirical results reveal a strong dynamic persistence in GRDP, underscoring the path-dependent nature of regional growth. While the composite ICT index shows a positive effect, ICT human resources exert a significant positive influence on GRDP, particularly when interacting with PCI. Conversely, ICT infrastructure demonstrates a negative effect, reflecting high investment costs and delayed returns. In addition, PCI is negatively associated with GRDP, suggesting potential challenges in translating institutional competitiveness into tangible economic outcomes. These findings show the heterogeneous impacts of different ICT factors and demonstrate the importance of strengthening digital human capital, improving the efficiency of infrastructure investment, and enhancing institutional quality to maximize the contribution of digital transformation to sustainable economic development.