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Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)

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  • Emiliano Magrini

    (Sapienza University)

  • Pierluigi Montalbano

    () (University of Sussex and Sapienza University)

Abstract

Following on from the existing poverty assessments of trade liberalisation in Vietnam under "doi moi", the aim of this paper is to provide a parallel assessment of vulnerability from trade. Taking advantage of the existence of extensive household data from two different sets of Vietnamese household surveys (VLSS and VHLSS) covering the entire period 1992-2008, it applies a new vulnerability measure to assess empirically the presence of robust heterogeneity in the vulnerability of Vietnamese households according to their relative position in trade related activities. The contribution of this paper is twofold: it sheds light on the timely debate on vulnerability to poverty from trade openness focusing on micro linkages between trade liberalisation and household consumption over a longer time span than is usually covered by current literature; it proposes a new vulnerability measure capable of assessing, besides the non-stochastic poverty determinants and the observed impact of shocks on households, the net welfare effect of risk-induced "ex-ante" changing behaviour, using cross-sectional data. The main results of this paper are the following: it highlights the presence of a growing phenomenon of vulnerability induced by risk exposure alongside the reduction of poverty rates in Vietnam; it demonstrates the presence of a negative welfare effect of "ex ante" changing behaviour induced by risk exposure. On the top of that, it assesses robust heterogeneity in vulnerability according to households' relative position in trade related activities. Our empirical results are relevant for policymaking. They highlight that the so-called “economic stabilisation policies” should receive more consideration even in absence of downside shocks.

Suggested Citation

  • Emiliano Magrini & Pierluigi Montalbano, 2012. "Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)," Working Paper Series 3512, Department of Economics, University of Sussex.
  • Handle: RePEc:sus:susewp:3512
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    Cited by:

    1. Pietrelli, Rebecca & Salvatici, Luca & Montalbano, Pierluigi, 2015. "Food security and farmers' participation to value supply chain: the case of Ugandan maize," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207354, Italian Association of Agricultural and Applied Economics (AIEAA).
    2. repec:oup:erevae:v:44:y:2017:i:4:p:592-633. is not listed on IDEAS

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    Keywords

    trade openness; vulnerability; poverty; Vietnam;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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