Determinants of Vietnam’s Agricultual Exports, Focusing on Its Trading Partners’ Characteristics

Abstract

This study investigates the determinants of Vietnam’s agricultural exports, focusing on its trading partners’ characteristics. The author adopts Poisson Pseudo-Maximum Likelihood estimators to estimate a gravity model covering bilateral agricultural exports from Vietnam to 187 of its trading partners during 1996-2021. The empirical results reveal that exchange rate volatility and geographical distance hamper exports, while regional trade agreements (RTAs), shared borders, and dependent relationships in the past boost exports. When considering the features of importing countries, I find that population, GDP per capita, policy stability, and financial development are crucial in promoting Vietnam's agricultural exports. The findings of this study imply that it is necessary to maintain stable exchange rates and actively join RTAs to increase the agricultural exports of Vietnam. Moreover, to enhance agricultural exports, exporting firms should target trading partners in countries with large economic size, high per capita income, good governance quality, developed financial markets, or those who share a common border or have ever in dependent relationship with Vietnam.