Title: Gravity Model: An Application to Evaluate Vietnam's Global Trade Potential
Abstract: This paper will use gravity model with cross-section data of two single year 2010 and 2014 to identify and evaluate the significant factor influencing the trade volume of Vietnam with 65 main trading partners across the world. Dependent variable using in this paper is trade volumes (total exports plus imports) while independent variables are: economic size (measured by GDP), geographic distance, per capita GDP, openness (Trade – GDP ratio), and dummy variable RTA (Regional Trade Agreements). Estimated results showed that Vietnam’s trade flows are positively affected by size of economies, regional trade agreement and openness and negatively affected by distance. This study also provides suggestions for policy makers that Vietnam should take action to promote trade with current high potential trading partner such as: Switzerland, Luxembourg, Norway, Bulgaria, Hungary, Finland, Estonia, Poland, Kazakhstan, India, Hong Kong, Myanmar, Brunei, China and Indonesia.
Publication Year: 2015
Publication Date: 2015-01-01
Language: en
Type: article
Indexed In: ['crossref']
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