THE ASEAN FREE TRADE AGREEMENT AND VIETNAM’S TRADE EFFICIENCY
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.
About the Authors
T. H. Hai
Banking Academy of Vietnam
Russian Federation
Russian Federation
N. D. Thang
Banking Academy of Vietnam
Russian Federation
Russian Federation
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Review
For citations:
Hai T.H., Thang N.D. THE ASEAN FREE TRADE AGREEMENT AND VIETNAM’S TRADE EFFICIENCY. Review of Business and Economics Studies. 2017;5(1):60-69. (In Russ.)
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