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The Asean Free Trade Agreement and Vietnam’s Trade Efficiency

Author

Listed:
  • Hai, Thi Hong Nguyen

    (International Business Faculty, Banking Academy of Vietnam, Hanoi, Vietnam)

  • Thang, Ngoc Doan

    (International Business Faculty, Banking Academy of Vietnam, Hanoi, Vietnam)

Abstract

This study employs a stochastic gravity model to estimate efficiency performance of Vietnam’s trade with its main trading partners from 1995–2015. Trade efficiency is measured as the ratio of actual trade volume to the maximum likelihood. Moreover, it analyzes the effects of both natural and man-made trade barriers on trade efficiency. The empirical results suggest that the actual trade of Vietnam appears to be much smaller than a possible efficiency level and that there is large space for further progress. Export efficiency outweighs that of import. Vietnam’s AFTA membership has in general improved the trade efficiency, whereas tariffs and domestic devaluation downgrade it. Our findings lead to the recommendation that Vietnam should join more Free Trade Agreements (FATs) and eradicate the man-made barriers.

Suggested Citation

  • Hai, Thi Hong Nguyen & Thang, Ngoc Doan, 2017. "The Asean Free Trade Agreement and Vietnam’s Trade Efficiency," Review of Business and Economics Studies, CyberLeninka;Федеральное государственное образовательное бюджетное учреждение высшего профессионального образования «Финансовый университет при Правительстве Российской Федерации» (Финансовый университет), issue 1, pages 60-69.
    • Handle: RePEc:scn:031730:17011630
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    Citations

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    Cited by:

    1. Ramlawati Ramlawati & Aditya Halim Perdana Kusuma Putra, 2018. "Total Quality Management as the Key of the Company to Gain the Competitiveness, Performance Achievement and Consumer Satisfaction," International Review of Management and Marketing, Econjournals, vol. 8(5), pages 60-69.
    2. Memduh Alper Demir & Mustafa Bilik & Utku Utkulu, 2017. "The Impact of Competitiveness on Trade Efficiency: The Asian Experience by Using the Stochastic Frontier Gravity Model," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 5(4), pages 1-15.

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