The study examines output divergence and club convergence among 34 newly established provinces in Vietnam from 2010 to 2023. Applying the Phillips and Sul (Econometrica 75:1771–1855, 2007; J Appl Econom 24:1153–1185, 2009)’s methodology to panel data at both aggregate and sectoral levels, the analysis reveals significant divergence in real GDP per capita across provinces. The results also identify multiple convergence clubs, with notable differences in club membership across economic sectors. At the aggregate level, four convergence clubs are observed. In a first-of-its-kind sectoral analysis for Vietnam, the study uncovers six convergence clubs in the Agriculture, Forestry, and Fishery sector, and four clubs each in the Industry and Construction and Services sectors. Additionally, results from an ordered probit model show that initial GDP per capita, investment, labour force size, human capital, sectoral output shares, and population growth significantly influence club membership. Policy recommendations are derived from these findings.