[STBI-05-11-2015] The Impact of FTA on the Trade Flow of Goods in Vietnam

by Mr. Nguyen Quang Huy

11:00 am, Thursday, 05-11-2015
Hall H.001, UEH School of Economics


The study analyzes the effect of free trade agreement (FTA) on merchandise export of Vietnam by applying gravity model. The model is evaluated on a sample of 185 countries in the period 1990-2012 using country level data for total export value of goods. In order to deal with multilateral resistance terms in the model, the study employs the fixed-effect model to control for unobservable factors. Due to zero-export value in data set, the export-plus-one model, the multiplicative form of gravity model and adjusted sample selection model (SSM) are used to solve the zero-value in export between Vietnam and trading partners. Previous research argues for the lack of exclusion restriction in using SSM proposed by Heckman (1979), the paper proves that sample selection approach is more efficient than the other two models. The results from the study find out that Vietnam have positive relationship with the trade outflow. This finding is supported by the previous papers testing the impact of AFTA on the trade flow.


Mr. Nguyen Quang Huy is working at the Department of Research Administration and International Relations, University of Economics Ho Chi Minh City. Huy achieved Master of Arts in Development Economics from Vietnam – the Netherlands Programme (VNP).