The ASEAN Free Trade Agreement and Vietnam’s Trade Efficiency

Nguyen, Hai Xuan; Doan, Thang Ngoc

doi:10.5539/ass.v13n4p192

Cited by 8 publications

(8 citation statements)

References 14 publications

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“…Therefore, the composite error term is decomposed into the standard random error term and non-negative term, which captures trade inefficiency. The appearance of the non-negative error means that the actual level of trade is always lower than the potential level of trade because unobserved trade resistances hinder the actual trade from reaching the maximum level (Hai and Thang, 2017). This approach allows for estimating the frontier level of trade in the hypothetical case of no restriction.…”

Section: Introductionmentioning

confidence: 99%

“…Their results showed that membership in ASEAN contributed positively to the country's trade efficiency while rules of origin and non-membership in the EU and NAFTA had a negative impact. Hai and Thang (2017) employed a stochastic gravity model to estimate the efficiency performance of Vietnam's trade with its main trading partners from 1995 to 2015. They found that Vietnam's membership in the ASEAN Free Trade Agreement (FTA) has improved the trade efficiency, whereas tariffs and domestic devaluation have reduced it.…”

Section: Introductionmentioning

confidence: 99%

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

Doanh

Truong

Heo³

2020

JES

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PurposeThis paper aims at assessing the impact of institutional and cultural distances and trade barriers on ASEAN's trade efficiency using a panel data set of 65 countries for the period 2006–2017.Design/methodology/approachFirst, the authors applied an improved version of the stochastic frontier model to estimate the trade efficiency scores. After that, we used the system generalized method of moment (GMM) estimator to investigate the impacts of institutional and cultural distances on ASEAN's trade efficiency.FindingsThe results show that the trade efficiency of ASEAN countries with the rest of the world (ROW) is moderate, ranging from 0.561 to 0.612, but shows a downward trend. This result indicates that considerable trade potential exists between ASEAN countries and ROW. Institutional and cultural distances, as well as the trade barriers, negatively affect ASEAN's trade efficiency. Efforts to reduce differences in institutions and cultures and to promote trade liberalization are vital remedies for ASEAN countries to turn potentials into actual trade performance.Originality/valueThis study contributes to the existing literature in three different ways. First, this is the first study on the impact of the differences between internal and external characteristics on trade efficiency, specifically, the impact of institutional and cultural distances on ASEAN's trade efficiency. Second, to obtain accurate efficiency scores, the authors use an improved version of the stochastic frontier model proposed by Karakaplan (2018), which can control the problem of endogeneity. Third, in quantifying the determinants of trade efficiency, the authors apply a system GMM estimator, which allows us to overcome the problems of endogeneity, measurement errors, and omitted variables.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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

Doanh

Truong

Heo³

2020

JES

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“…The study by Nguyen and Doan (2017) is the first paper that uses the SFGM to study determinants of Vietnam's trade efficiency. The authors examined Vietnam's trade efficiency with 30 partners (both ASEAN and non-ASEAN) over an 11-year period (1995-2015).…”

Section: Literature Reviewmentioning

confidence: 99%

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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“…This challenge arises both from within the country and from abroad. From within the country, there are competitions between the firms the and industries (Nguyen and Doan, 2017). The competition can be in form of price wars, promotions, as well as the quality of after-sales services.…”

Section: Introductionmentioning

confidence: 99%

Untitled

2018

IRMM

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A decreasing number of manufacturing industries in some sectors in the region of Makassar city from the year 2012 to 2016 is generally influenced by the economic climate and is also affected by the poor performance and inability to compete and lack of attention to some industry on the application of total quality management (TQM) in their companies. TQM is an important concern because it involves all elements of management and continuously improving in order to shape the company's well performance and to create the consumers' satisfaction so that the business continuity can be maintained. This study took a sample of 43 large-scale manufacturing companies with the number of respondents consists of 129 managers, with the data collection using questionnaires. The research approach uses explanatory research by making the structural equation model as a tool of analysis test. The results of this study stated that the better implementation of TQM practices the more increase in the competitiveness of the company, consumers' satisfaction, and business performance, the better competitiveness is also increasing the consumers' satisfaction but does not affect the business performance of these manufacturing companies in Makassar.

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The ASEAN Free Trade Agreement and Vietnam’s Trade Efficiency

Cited by 8 publications

References 14 publications

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

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

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

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