TAILIEUCHUNG - Determinants of intra-industry trade for Vietnam’s manufacturing industry
Determinants of intra-industry trade for Vietnam’s manufacturing industry. This study focuses on identifying the country-specific determinants of intra-industry trade in the manufacturing sector between Vietnam and major trading partners using random effects estimation. The results indicate that the extent of Vietnam’s intra-industry trade is positively correlated with average country size and average income levels, while it is negatively correlated with income inequality, distance, and trade imbalance. | Journal of Economics and Development, , , April 2016, pp. 5-18 ISSN 1859 0020 Determinants of Intra-Industry Trade for Vietnam’s Manufacturing Industry Tran Nhuan Kien Thai Nguyen University of Economics and Business Administration, Vietnam Email: tnkien@ Tran Thi Phuong Thao Thai Nguyen University of Economics and Business Administration, Vietnam Email: Abstract This study focuses on identifying the country-specific determinants of intra-industry trade in the manufacturing sector between Vietnam and major trading partners using random effects estimation. The results indicate that the extent of Vietnam’s intra-industry trade is positively correlated with average country size and average income levels, while it is negatively correlated with income inequality, distance, and trade imbalance. Those factors affect horizontal intraindustry trade (HIIT) and vertical intra-industry trade (VIIT) in the same way except for the effect of income inequality (DPCI) on VIIT with an unexpectedly statistically insignificant impact. The coefficient of FTA is unexpectedly insignificant in three estimations, indicating an ambiguous effect of the participation in regional economic integration schemes on the share of IIT, HIIT and VIIT. Keywords: Vietnam; manufacturing sector; IIT; HIIT; VIIT. Journal of Economics and Development 5 Vol. 18, , April 2016 1. Introduction number of empirical studies devoted to identifying the determinants of IIT, most of them have focused on the IIT of developed countries, whereas the number of studies dedicated to developing countries remains modest. In investigating determinants of IIT, several studies in the literature are inclined to country-specific determinants, while others paid attention to industry-specific factors, and many tend to test both types. In order to obtain a thorough understanding on this subject, recent researches seek to simultaneously figure out determinants of IIT .
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