ssdfsdf 1 HỘI THẢO KHOA HỌC QUỐC TẾ INTERNATIONAL CONFERENCE KHỞI NGHIỆP VÀ SÁNG TẠO CƠ HỘI VÀ THÁCH THỨC ĐỐI VỚI DOANH NGHIỆP VIỆT NAM ENTREPRENEURSHIP AND CREATIVITY OPPORTUNITIES AND CHALLENGES FOR[.]
HỘI THẢO KHOA HỌC QUỐC TẾ INTERNATIONAL CONFERENCE KHỞI NGHIỆP VÀ SÁNG TẠO CƠ HỘI VÀ THÁCH THỨC ĐỐI VỚI DOANH NGHIỆP VIỆT NAM ENTREPRENEURSHIP AND CREATIVITY OPPORTUNITIES AND CHALLENGES FOR VIETNAM’S ENTERPRISES TẬP NHÀ XUẤT BẢN HÀ NỘI Tháng - 2019 CHỦ ĐỀ TOPIC INTRA INDUSTRY TRADE IN MANUFACTURES BETWEEN VIETNAM AND ASEAN THƯƠNG MẠI NỘI NGÀNH TRONG NGÀNH CHẾ TẠO GIỮA VIỆT NAM VÀ CÁC NƯỚC ASEAN Phan Thanh Hoan, PhD College of Economics, Hue University Abstract: This paper is aimed to empirically investigate the patterns and development of intra-industry trade (IIT) in manufactures between Vietnam and the members of The Association of Southeast Asian Nations (ASEAN) in the period of 2007-2016 The widely used Grubel-Lloyd Index is employed to calculate the levels of IIT, then distinguished into vertical and horizontal IIT of Vietnam-ASEAN manufacturing trade for the study period Next, the developments of Vietnam-ASEAN IIT are discussed The results show that the IIT of Vietnam-ASEAN manufactures is dominated by horizontal IIT The paper also suggests some policy implications for the development of IIT between the two parties Keywords: Intra-industry trade, manufactures, development, Vietnam, ASEAN JEL Classification: F14, C2 Tóm tắt Nghiên cứu nhằm phân tích mơ hình phát triển thương mại nội ngành (IIT) ngành chế tạo Việt Nam thành viên Hiệp hội quốc gia Đông Nam Á (ASEAN) giai đoạn 2007-2016 Chỉ số IIT Grubel-Lloyd dùng để tính tốn IIT, IIT theo chiều dọc chiều ngang ngành chế tạo Việt Nam ASEAN Tiếp phân tích mơ hình phát triển IIT Việt Nam ASEAN Kết cho thấy IIT ngành chế tạo Việt Nam ASEAN chủ yếu IIT theo chiều ngang Từ nghiên cứu đề xuất số hàm ý sách cho phát triển IIT hai bên Từ khóa: Thương mại nội ngành, chế tạo, phát triển, Việt Nam, ASEAN Introduction Trade relations between Vietnam and ASEAN have expanded significantly over the past decades Total export turnover between Vietnam and ASEAN countries has increased seven-fold in the 20 years since Vietnam became a member of the bloc ASEAN has continually been an important trading partner of Vietnam and the bilateral trade relationship has been growing Total export turnover stood at $41.49 billion in the 20-year period, accounting for 11.8 per cent of Vietnam’s total trade ASEAN was the largest trading partner of Vietnam in 1996 and 20 years later is the fourth largest partner, after the US, the EU, and China (General Department of Vietnam Customs, 2017) There has been a significant increase in trade of manufactured products between Vietnam and ASEAN since 2000s According to our calculation, the manufactured products constitute over 80% of Vietnam’s exports to, compared to about 65% of imports from ASEAN This is owing to the increasing economic scale of the two and the industrialization progress of ASEAN’s members The literature of international trade studies shows the great attention of many researchers on the intra-industry trade (IIT), which is defined as the simultaneous exports and imports of a product within a particular industry, in world trade The first attempt of intra-industry trade study was conducted by Grubel and Lloyd (1975), by which the most popular index for measurement of intra-industry trade was developed Over time, there have been many other economists contributed to this area However, most previous studies (e.g, Cheong and Bang, 2008; Hastiadi, 2012; Chemsripong et al., 2005; Umemoto, 2005) have focused on the total IIT without distinguishing between its components, the Horizontal intra-industry trade (HIIT) and Vertical intra-industry trade (VIIT) Furthermore, only a few studies (e.g Das, Gouranga G., 2003; Jambol, A.B., & Ismail, N.W., 2013; Kumar, Sushil, 2014) analyze the characteristics and pattern of IIT For ASEAN intra-industry trade, there has been little study in this region, especially at the industry level, (see, Julia Wiklander, 2008; AK Jha, S Saha, 2011; Sujinda Chemsripong, 2012; Tan, Day-Yin and Chin, Mui-Yin, 2017) Moreover, few studies examined the Vietnamese case, including manufactured trade flows Thus, in order to complement these limitations, this study will classify and discuss the development of manufactured trade between Vietnam and ASEAN, divide IIT into HIIT and VIIT in order to examine the development of IIT’s components The purpose of this study is to access the pattern and trend of IIT of Vietnam’s manufacturing trade with ASEAN First, the well-known and widely used Grubel-Lloyd Index is employed to calculate the levels of total, vertical and horizontal intra-industry trade of Vietnam-ASEAN manufacturing trade for the 2007-2016 period, then the developments of Vietnam-ASEAN IIT are discussed This paper is organized as follows Section summarizes the review of IIT’s literature and theoretical background of IIT Section provides an analysis of VietnamASEAN intra-industry trade in manufactures Section concludes the paper Literature Review and Research Methods The intra-industry trade literature began when Balassa (1966) analyzed the within industries of customs union in Europe Grubel and Lloyd (1975) introduced a comprehensive index to measure IIT The most obvious explanation for the occurrence of IIT is product differentiation (Krugman, 1980; Lancaster, 1980) Product differentiation occurs in a situation where individual firms in an industry produce different varieties of the same product which are close substitute in consumption and/ or production Products can be differentiated in three main forms: horizontal, vertical and technological differentiation Horizontal intra-industry trade (HIIT) is defined as the exchange of products of similar quality, but different characteristics or attributes The theoretical basis of HIIT was developed by Lancaster (1980), Krugman (1981), Helpman (1981, 1987), whereas vertical intra-industry trade (VIIT) involves simultaneous export and import of similar goods of varying qualities (Falvey, 1981; Shaked & Sutton, 1984) There are alternative index definitions to calculate intra-industry trade In this study the well-known Grubel-Lloyd (G-L) Index (1975) is used The standard G-L intra-industry trade index is computed as follows: where Xi and Mi stand, respectively, for the exports and imports of industry i IIT index can vary between and The IITi is closed to denotes more trade in industry i or intra-industry trade, whereas, IITi is closed to zero means inter-industry trade In order to distinguish IIT into its vertical (VIIT) and horizontal (HIIT) components, existing literature shows the consistency in methodology which is based on the assumption that the difference in unit cost of export and import reflects the quality difference in goods of export and import between trading partners (Greenaway, Hine, and Milner, 1995); Fontagné, Freudenberg, and Péridy, 1997; and Aturupane, Djankov, and Hoekman, 1999) Thus, this study uses the ratio of unit value (UV) of export and import as the proxies for product differentiation Export (import) unit values are obtained by dividing the value of total exports (imports) to total amounts of exports (imports) IIT is considered as horizontal if the export and import values differ by less than % (15, 25, i.e.) if they fulfill following condition: Vertical IIT then is defined as: The reason of using percent in the calculations is that, the transaction costs are estimated to constitute approximately percent of the product prices To understand the technological level embodied in manufactures trade, exports and imports are decomposed into four categories based on the UNCTAD’s classification of manufactured products by degree of manufacturing groupings as follows: Labor-intensive and resource-based, Low skill and technology intensity, Medium skill and technology intensity, High skill and technology intensity All trade data, unit prices of export/import are collected from the UN Comtrade Database and classified into certain sectors at three-digit level of Standard International Trade Classification (SITC) code Development of Vietnam-ASEAN intra-industry trade in manufactures 3.1 Overall trend of Vietnam-ASEAN intra-industry trade in manufactures This section provides the description of the extent, nature and dynamics of manufactured trade between Vietnam and ASEAN countries Vietnam’s trade of manufacturing goods with ASEAN has maintained an increasing trend over the period of 2007-2016 Vietnam’s manufactures exports to ASEAN rose from $2,736.1million in 2010 to $13,372.6million in 2016, while imports over this period grew from $9,1.3.2million to nearly $16 billion (table 1).Although the shares of manufacturing goods in VietnamASEAN trade increased between 2007 and 2016, Vietnam’s manufactured imports grew at an annual average rate of 6.33 percent, while it’s exports to ASEAN grew at annual average rate of 19.28 percent during this period Table Vietnam’s Manufactured Trade with ASEAN: 2007-2016 Unit: $US million & percent 2007 2010 2013 2016 Manufactured exports 2,736.1 4,915.1 12,555.4 13,372.6 Share of total exports 33.74 47.42 67.56 76.64 Manufactured imports 9,103.2 9,826.5 13,510.3 15,820.6 Share of total Imports 57.22 59.89 63.47 65.68 Annual Growth 19.28 6.33 Source: Calculated from UN comtrade data Table presents the trends in technology intensity of Vietnam-ASEAN manufactured trade in the period of 2007-2016 As shown in table 2, trade in manufacturing between Vietnam and ASEAN was mostly driven by high-technology industries, which accounted for about 42 percent and 44 percent of Vietnam’s manufactured exports and imports in 2016, respectively However, the share of trade in high-technology manufactures started to decrease from 2000 Over the same period, the share of imports in medium-technology manufactures rose considerably, from 23.54 percent to 32.74 percent, while the corresponding figure for export decreased from 32.41 percent to 18.52 percent Low-technology industries are also an important item in Vietnam-ASEAN export structures, which accounted for approximately 16 percent of Vietnam’s manufactured exports to ASEAN in 2016 Low-technology products are important in exports than in imports while high-technology products are relatively more important in imports than in exports Vietnam-ASEAN manufactured trade structures show a considerable shift, which is from high-technology industries towards medium-technology and low-technology industries in Vietnam’s exports to ASEAN This shift is most consistent with the technological catching-up progress in ASEAN countries Table Vietnam-ASEAN’s manufactures trade by degree of technology Unit: percent 2007 Category1 2010 2013 2016 Export Import Export Import Export Import Export Import Labour-intensive and resource-based 21.84 13.01 22.43 15.91 16.96 13.39 21.83 12.87 Low skill and technology intensity 20.68 16.26 22.26 14.63 20.73 5.98 15.93 5.71 Medium skill and technology intensity 32.41 23.54 21.56 27.31 15.34 25.24 18.52 32.74 High skill and technology intensity 23.71 40.89 29.73 36.19 46.34 52.62 42.77 44.71 1.36 6.31 4.02 5.96 0.63 2.76 0.95 3.98 Unclassified Source: calculated from UN comtrade data The pattern of intra-industry trade can be further analyzed by computing the IIT levels for each industry at the disaggregated industrial level Table present the top 10 highest IIT levels of manufactured products at 3-digit level of Standard International Trade Classification (SITC) Of these major product groups, Engines and motors, non-electric (SITC code 714) recorded the highest IIT levels Overall, the top 10 products with high level of IIT differed from different trade partners In 2016, product groups with high intraindustry trade varied differently from country to country This indicates the significant diversification of Vietnam’s trade in manufactures with ASEAN Table Highest IIT index in Vietnam-ASEAN Manufacturing Trade in 2016 SITC Code Product Name IIT SITC Code Product Name 714 Engines and motors, non-electric (other than those of groups 712, 713 and 718); parts, n.e.s., of these engines and motors 1.000 812 Sanitary, plumbing and heating fixtures and fittings, n.e.s 0.962 723 Civil engineering and contractors' plant and equipment; parts thereof 0.993 692 Metal containers for storage or transport 0.958 697 Household equipment of base metal, n.e.s 0.990 892 Printed matter 0.956 562 Fertilizers (other than those of group 272) 0.983 582 Plates, sheets, film, foil and strip, of plastics 0.936 642 Paper and paperboard, cut to size or shape, and articles of paper or paperboard 0.978 749 Non-electric parts and accessories of machinery, n.e.s 0.924 IIT Categories based on the UNCTAD’s classification of manufactured products by degree of manufacturing groupings ...HỘI THẢO KHOA HỌC QUỐC TẾ INTERNATIONAL CONFERENCE KHỞI NGHIỆP VÀ SÁNG TẠO CƠ HỘI VÀ THÁCH THỨC ĐỐI VỚI DOANH NGHIỆP VIỆT NAM ENTREPRENEURSHIP AND CREATIVITY... IIT theo chiều dọc chiều ngang ngành chế tạo Việt Nam ASEAN Tiếp phân tích mơ hình phát triển IIT Việt Nam ASEAN Kết cho thấy IIT ngành chế tạo Việt Nam ASEAN chủ yếu IIT theo chiều ngang Từ... development, Vietnam, ASEAN JEL Classification: F14, C2 Tóm tắt Nghiên cứu nhằm phân tích mơ hình phát triển thương mại nội ngành (IIT) ngành chế tạo Việt Nam thành viên Hiệp hội quốc gia Đông Nam Á (ASEAN)