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Product mix adjustments and import competition in Vietnam's manufacturing industries

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  • Tien Dzung Nguyen
  • The Kien Nguyen
  • Xuan Nam Vu

Abstract

In this article, we make use of Vietnam's annual enterprise surveys to investigate the product selection and product mix responses to import competition in manufacturing firms. We estimate the effect of imports from Vietnam's free trade agreement partners on firms' product scope and sales concentration, controlling for firms and industry characteristics and the conditions in export markets. The empirical results consistently indicate that Vietnam's manufacturing firms narrow the product scope and concentrate on better selling products in response to rising import competition. Given the dominant presence of quality sorting in the manufacturing industries, our analysis suggests an aggregate quality improvement as firms reallocate sales towards high‐quality products in responses to competition.

Suggested Citation

  • Tien Dzung Nguyen & The Kien Nguyen & Xuan Nam Vu, 2024. "Product mix adjustments and import competition in Vietnam's manufacturing industries," The World Economy, Wiley Blackwell, vol. 47(5), pages 1800-1826, May.
    • Handle: RePEc:bla:worlde:v:47:y:2024:i:5:p:1800-1826
    DOI: 10.1111/twec.13511
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