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Determinants of Vietnam’s exports: Application of the Gravity Model

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  • Nguyen, Huy Quynh

Abstract

The success of exports in Vietnam has become a driving force for economic growth since the reform in 1986. The paper uses data from 2001 to 2004 to estimates the gravity model for Vietnam’s exports with the random effect estimation. The empirical results show that the bilateral trade of Vietnam has positive relationship with the country’s GDP and importing countries’ GDP. Furthermore, it has a negative relationship with distance from Vietnam to trading partners. These results are the same as the previous studies of the gravity model. Particularly, foreign direct investment, border effects and exchange rate play a significant role in promoting exports of Vietnam. Besides, the deepened integration into the region and world market also has significant impacts on expanding exports of Vietnam. Therefore, these factors have contributed to explaining the success in exports of Vietnam over the past few years.

Suggested Citation

  • Nguyen, Huy Quynh, 2014. "Determinants of Vietnam’s exports: Application of the Gravity Model," MPRA Paper 59363, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:59363
    as

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    References listed on IDEAS

    as
    1. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-481, August.
    2. Martin, Will, 2001. "A Quantitative Evaluation of Vietnam's Accession to the ASEAN Free Trade Area," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 545-567.
    3. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Gravity model; exports ; determinants of exports;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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