Globalisation, Logistics and Food Supply: Evidence from Vietnam

Abstract

Most countries satisfy domestic food consumption by importing from foreign supplies, thus highlighting the role of agricultural exports in maintaining and diversifying the global food supply. In the age of globalisation, whether the flourishing number of regional trade agreements (RTAs) has been facilitating greater market access of agricultural and food products is questioned by national governments. Meanwhile, logistics performance has been the bottleneck of emerging economies, which exerts negative impacts on agricultural export competitiveness in foreign markets. Overall, the interlink between globalisation, logistics and food supply has not been addressed adequately. Therefore, this paper employs the trade gravity model to examine the relationship between agricultural exports, RTAs membership, and logistics performance in the case of Vietnam and her 97 major trading partners. Static and dynamic panel data estimation are employed with the methods applied to solving the zero trade and endogeneity concerns. Findings confirm the interlink between globalisation, logistics and food supply. RTAs-based globalisation and logistics policies are intertwined to secure and diversify import-driven food supply. The unified framework for long-term and sustainable development which aims at strengthening the interlink between globalisation, logistics, agriculture and global food supply should be considered in policy formulation.

Effects of logistics performance on Vietnam’s exports: a quantitative analysis using the PPML method

“…There are some empirical studies on the eect of logistics performance on Vietnam's exports, however, this relationship is still not fully developed (Le, 2021). Most of the studies on this topic are based on the trade gravity model and only cover selected sets of Vietnam's trading partners.…”

“…Because time-speci c eects were not controlled in the study, the ndings might be biased by common shocks in certain years during the sampling period. Le (2021) and Le (2022) studied the eects of logistics performance in tandem with some other factors on Vietnam's aquaculture and agriculture products exports at sector and subsectoral levels. Various estimation techniques were used to address dierent issues in the trade gravity model separately, such as zero trade and reverse causality, wherein bilateral trade can also aect logistics performance; however, the ndings were inconsistent and depended on the choice of estimators.…”

“…Because the only exporter in this study is Vietnam, the only three countries with shared borders are China, Laos, and Cambodia. Following the previous empirical studies of Vietnam's exports (Huynh, 2021;Le, 2021;Le, 2022;Le, 2023;Le and Nguyen, 2022), we specify a dummy variable of regional trade agreement, denoted by RTA ij,t . It equals 1 if both trading countries i and j are members of a regional trade agreement in year t, and 0 otherwise.…”

“…Particularly, data on LPI is only available in 2007 and biennial from 2010 to 2018. In this study, our approach is to gather all available trade data in contrast with the previous studies (Huynh, 2021;Le, 2021;Le, 2022;Le, 2023;Le and Nguyen, 2022;Tran et al, 2023) that only covered smaller collections of trading countries with Vietnam. Regarding control variables, we obtain GDP data from the WB's World Development Indicators (WDI), geographical distance from CEPII, and regional trade agreements from WTO.…”

“…Due to the revolutionary advances in logistics and supply chain management, such as containerization and the development of logistics information systems, logistics has transformed from a secondary factor to one of the vital pillars of the global economy (Song and Lee, 2022). While the positive eect of logistics performance on Vietnam's exports has been found in some empirical studies (Huynh, 2021;Le, 2021;Le, 2022;Le, 2023;Tran et al, 2023), most of them only considered the overall logistics performance and covered limited trading partners of Vietnam. In addition, there are concerns about estimation shortcomings.…”