Impact of institutional and cultural distances on ASEAN's trade efficiency

Doanh, Nguyen Khanh; Truong, Linh Tuan; Heo, Yoon

doi:10.1108/jes-07-2020-0343

Cited by 9 publications

(31 citation statements)

References 43 publications

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“…This result is consistent with that of Doanh, Truong, and Heo (2022), and it suggests that a higher institutional quality of Vietnam and its EU partners can improve Vietnam's TG export efficiency. Table 3 also reports a significant and negative effect of infrastructure quality on the inefficiency of Vietnam's TG exports to EU countries.…”

Section: Resultssupporting

confidence: 86%

Determinants of the Export Efficiency of Vietnam’s Textiles and Garments to EU Countries – A Stochastic Frontier Gravity Approach

Vinh

Phuong

2022

5002

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While free trade agreements (FTAs) can provide access to new markets, it is not automatic that producers of home countries can export to the maximum level that can be predicted by market size and level of trade liberalization. Hence, it is necessary to know the level of export efficiency and its determinants if countries want to maximize the benefits of their global integration efforts. Textiles and garments are important exports and growth drivers of Vietnam, but their export efficiency has not been studied before. This paper aims to bridge this gap in the literature by estimating the export efficiency of Vietnam's textile and garment exports to 28 EU countries and identifying its determinants, which are both behind and beyond the borders. This paper uses a panel data of Vietnam’s textile and garment exports to 28 EU countries over the period from 2007–2019 and a stochastic frontier gravity model (SFGM) with the one-step estimation method for empirical analysis. Its findings suggest that the efficiency of Vietnam’s textile and garment exports to EU countries is relatively low but it increases over the period of study. Regarding determinants of efficiency, the paper found that infrastructure, technology readiness, and quality of institutions have significant impacts on the efficiency to various degrees and at different significance levels.

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Section: Resultssupporting

confidence: 86%

Determinants of the Export Efficiency of Vietnam’s Textiles and Garments to EU Countries – A Stochastic Frontier Gravity Approach

Vinh

Phuong

2022

5002

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“…However, there is no consensus on the impact of cultural distance on international trade. On the one hand, several studies have revealed that cultural distance inhibits trade flows [3,11]. The reason is that significant cultural differences make it challenging to understand and predict the behaviour of others [17], which complicates interactions [18], thus impeding international trade.…”

Section: -1-impact Of Cultural Distance On Tradementioning

confidence: 99%

“…Cultural distance not only affects trade flows but also influences the efficiency of trade. In an application to the ASEAN economic community, Doanh et al [11] investigated the impact of cultural differences and trade barriers on the trade efficiency of ASEAN countries. By adopting the system-GMM approach, they found that cultural distances and trade barriers negatively affected the trade efficiency of these countries in the period 2006-2017.…”

Section: -1-impact Of Cultural Distance On Tradementioning

confidence: 99%

“…Finally, compared to Asian countries on the Belt and Road, bilateral trade flows between China and European countries are less sensitive to cultural distance, except for China's imports from its trading partners. Recently, Doanh et al [11] employed the system generalized method of moments (system-GMM) approach to analyze the influence of institutional and cultural distances and trade barriers on trade efficiency in ASEAN countries from 2006 to 2017. They found that an increase in institutional and cultural distances leads to decreased trade efficiency in the Association of South East Asian Nations (ASEAN) countries.…”

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confidence: 99%

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The Role of Cultural and Institutional Distances in International Trade

Long

Gấm²,

Van³

et al. 2023

Emerg Sci J

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Despite the effectiveness of the observed barriers such as taxes and quotas to adjust bilateral trade, they are still not well supported by governments in general and the World Trade Organization in particular. Therefore, in recent years, unobserved barriers have been critical tools to modify the trade flows between nations worldwide. China’s exports account for a massive proportion of global trade. However, the role of cultural and institutional distance in China’s trade flow has not been much explored. This study analyzes the impact of cultural and institutional differences on China's exports between 2006-2017 by adopting a system-GMM estimator. The main findings are, first, that cultural and institutional differences between China and its trading partners reduce China's exports. Second, cultural and institutional distances have the strongest influence on China's exports to high-income countries, followed by low-income countries, and finally middle-income countries. Third, manufactured products are the most sensitive to cultural and institutional distances. Based on these findings, several policies for China, as well as for emerging economies in general, are suggested for reducing cultural and institutional distances and boosting their exports. Doi: 10.28991/ESJ-2023-07-02-015 Full Text: PDF

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“…The relevant countries can convert potential into actual trade performance by reducing institutional and cultural differences [39]. In addition, the friendliness of a country's people and the number of sister cities considerably affect the willingness of traders to choose that country as a trade destination.…”

Section: H2: Ic Can Facilitate Utmentioning

confidence: 99%

Can policy coordination facilitate unimpeded trade? An empirical study on factors influencing smooth trade along the Belt and Road

2022

Applied Mathematics and Nonlinear Sciences

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There are 94 countries and regions along the Belt and Road (CRBR). China proposed the Belt and Road Initiative (BRI) in 2013, and it encompasses five core elements: unimpeded trade (UT), policy coordination (PC), infrastructure connectivity (IC), financial integration (FI) and people-to-people bond (PPB). The BRI has facilitated international relations and multilateral trade, in addition to building a community with a shared future for mankind. However, factors such as political relations and cultural distance have affected bilateral trade (BT) between China and CRBR. Further analysis is required to explore the association between UT and policy, infrastructure, financial and people-to-people connectivity. A multiple linear regression analysis using SPSS 20 revealed that: (1) IC, FI, PPB and improved economic levels can promote BT to varying degrees, but spatial distance inhibits the development of BT; and (2) the coordination between policy subjects does not promote UT up to any significant level. Accordingly, strengthening infrastructure and FI, promoting people-to-people and bilateral exchanges, and opening extra China–Europe freight trains and maritime transport will enhance UT, expand BT and invigorate the global economy.

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Impact of institutional and cultural distances on ASEAN's trade efficiency

Cited by 9 publications

References 43 publications

Determinants of the Export Efficiency of Vietnam’s Textiles and Garments to EU Countries – A Stochastic Frontier Gravity Approach

Determinants of the Export Efficiency of Vietnam’s Textiles and Garments to EU Countries – A Stochastic Frontier Gravity Approach

The Role of Cultural and Institutional Distances in International Trade

Can policy coordination facilitate unimpeded trade? An empirical study on factors influencing smooth trade along the Belt and Road

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