Essays on the Export Performance of Vietnam/Essais sur la Performance à l'Exportation du Vietnam

Trade liberalization and international economic integration are major and important issues especially to developing countries including Vietnam. They have provided the country with many opportunities such as foreign investment projects from developed countries, an increase in the State budget through taxation on exports and imports, the higher level of employment, which have all contributed to improving the standard living of the people. Since the country's Reform (Doi Moi) in 1986, trade liberalization has brought about an increase export value from 0.78 billion USD in 1986 to more than 72 billion USD in 2010 which accounted for an average of 70% increase to the GDP of Vietnam. Moreover, Vietnamese firms are becoming increasingly aware of the importance of innovation and this is becoming the main driver for Vietnam's deeper participation in regional and global economic integration organization such as ASEAN and WTO. Exports play an important role in Vietnam’s international trade, helping to increase the national revenue and to improve the position of Vietnamese firms in the global value chain. Such an improvement of Vietnam's position in the global value chain means being higher in the chain rather than carrying out simple processing at the low-end. If the production factors which include labor, capital, and fixed assets are analyzed in relation to firms' exports, plausible assessments of Vietnamese firms' contributions to the global chain can be determined. It should be also noted that the country's trade policy reform has affected the structure of Vietnam's exports during periods, has been subject to the effect of the volatile world's trading market and the effect of an emerging giant exporter such as China. However, Vietnam's exports are facing some problems on international trade market for various reasons. Firstly, the export structure continues to be mainly based on primary and labor-intensive products such as the agricultural, forestry, fishery and footwear sectors. Secondly, low value added and labor intensive products account for a large proportion of the total exports since almost all economic sectors of Vietnam are involved in the assembly and simple processing stage of the global value chain. We hope this dissertation can help to constitute a reliable basis for formulating export trade policy. Firstly, there is a need for greater efforts from Vietnamese government to implement social economic structural reform with a special focus on SOEs, in order to strengthen investors' confidence. Secondly, there is also a need to encourage the shift away from labor-intensive export products toward capital-intensive products with special emphasis on innovation in particular through research and development activities of firms. The dissertation studies export trade of a single country namely Vietnam. It is an empirical study, which tests both macro and micro determinants of Vietnamese export trade. Particularly, the dissertation uses export trade data at country and firm level to test hypotheses for each determinant including firm and sector effects. We have extracted a dataset on Vietnam's export trade for the 1997-2009 period via WITS of the World Bank. For firm's gravity model, we used export data of firms from VCO for the 2006-2010 period. We analyzed determinants of firms' exports by combining firms' export data and the data of footwear, rice and wood and wood products firms' characteristics for the year 2008. Since firms' export intensity strictly lies in the unit interval, we transformed it into the type of logit then attempted with the OLS and quantile regression methods. Our dissertation mainly focuses on certain external factors of Vietnamese exports at macro and micro levels and analyzes some important determinants of exporting firms in three sectors namely footwear, rice and wood and wood products. Relevant findings based on empirical analysis serve to suggest policy implications and firms' managerial practices. In general, wealthier nations are preferred destination market for Vietnamese exports because of their higher purchasing power. The government of Vietnam therefore tries to negotiate proactively and conclude trade agreement as well as memorandum of understanding with such countries as these measures facilitate trade for local firms. However, rice firms in particular do not necessarily consider country with the large economy to be their destination market. In fact, there are several reasons for firms to enter international market and to sign contracts such as to improve their net profits, to expand their market share or to develop potential market. Regarding determinants of Vietnamese exporting firms, higher wages reduce a firms' propensity to export in general which significantly affects wood and wood products and footwear firms. Although, in some cases, increasing wages somewhat improve worker's productivity thus increasing export revenue, in other cases for economic reasons, higher wages can not be afforded by employers for manual workers in manufacturing sectors where skilled labor is not essential. Investing in high-tech production technology does not necessarily increase growth in the value of Vietnamese firms' exports in three sectors mentioned. Although, state-owned firms have been granted preferential or priority treatment by the Government, they appears to be less efficient than others. The regression result shows that state-owned firms in all three sectors are lagging in export performance. Ongoing Government support for state-owned, firms may lead to an unfair competitive environment especially for small, privately owned firms since the Government protection of the Government seem to be unreasonable. If full data on firms' exports of in all sectors had been obtained, the author of the dissertation were able to draw conclusions on the determinants for all sectors and compare their effects on exports accordingly. We consider innovation indicators would be interesting particularly for firms located in a developing and emerging country such as Vietnam. Therefore, we need an appropriate survey method to collect information to resolve the missing data problem of the existing database.