UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY ERASMUS UNIVERSITY ROTTERDAM VIETNAM THE NETHERLANDS VIETNAM NETHERLANDS PROGRAMME FOR M A IN DEVELOPMENT ECONOMICS Quantifying Eff[.]
UNIVERSITY OF ECONOMICS HO CHI MINH CITY INSTITUTE OF SOCIAL STUDIES ERASMUS UNIVERSITY ROTTERDAM VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS Quantifying Effects of EU Antidumping Duty on Vietnam Footwear By NguyễnTrườngToan A thesis submitted in partial fulfilment of the requirements for the degree of Master of Arts in Development Economics Under the Supervision of: Assoc.Prof Dr.PhạmHoàngVăn and Assoc.Prof Dr.NguyễnTrọngHoài HO CHI MINH CITY, April 2014 DECLARATION This is to certify that this thesis entitled “Quantifying effects of EU antidumping duty on Vietnam footwear”, which is submitted by me in fulfillment of the requirements for the degree of Master of Art in Development Economic to the Vietnam – The Netherlands Programme The thesis constitutes only my original work and due supervision and acknowledgement have been made in the text to all materials used Nguyễn Trường Toan ii ACKNOWLEDGEMENT I would never have been able to finish my dissertationwithout the help and support of people surrounding me First and foremost, I would like to express my gratitude tomy mentors Assoc Prof Dr PhạmHoàngVăn, and Assoc Prof Dr NguyễnTrọngHoài for the continuous support of my M.A study and research; for their patience, encouragement, erudite knowledge Their excellent guidance encouraged me in all the time of doing this study I have been strikingly lucky to have supervisors who cared so much my thesis, and answered to all my questions and queries punctually I could not have imagined having better supervisors and advisors for my research Besides my mentors, I would like to thank Dr Pham Khánh Nam and Prof Jame Riedel for their thorough comments and worthy ideas that help to enhance my thesis’s value My sincere thanks also goes toall the lecturers at the Vietnam – NetherlandsProgram for their knowledge of all the courses, during the time I studied at theprogram.I would like to offer my special thanks to Dr LêVănChơn, Dr, TrươngĐăngThụy, Dr Lorenzo pellegrini who help me significantly in the courses and thesis writing processes In addition, I would like to express my great appreciation to my friends for their motivations Last but not the least;I owe a very important debt tomy family: my parents NguyễnVănTố and Đỗ Thị Liễu, for giving birth to me at the first place and supporting me spiritually throughout my life Hồ Chí Minh city, April 2014 NguyễnTrườngToan iii ABBREVIATIONS AD Antidumping Duties GATT General Agreement on Tariffs and Trade WTO World Trade Organization EU European Union U.S United States EC European Commission C.I.F cost.insurance freight CN8 8-digit Combined Nomenclature code HTS Harmonized Tariff Schedule F.O.B Free on Board GSO Vietnam General Statistics Office BTA Bilateral Trade Agreement USITC United States International Trade Committee EUROSTAT European Commission Statistic Office W.P.T wood and wooden, papers and textiles iv ABSTRACT This paper examines effect of EU antidumping on Vietnam footwear firms We find that EU AD causes a 52.8% decline of Vietnam targeted export products, at least Besides value, there is 42.2% reduction of the least affected scenario For the most impacted images, it leads to a fall of 105.6% and 107,1% for value and volume in five years after AD, respectively This paper also indicates that there is no association between AD and price of Vietnam export We find very little evidence that Vietnam footwear firm’s revenue, labor payroll and jobs have association with AD It is only small firms decline revenue, but small firms contribute only 1.65% total revenue of footwear And, there is no evidence that footwear firm discharge their employees because of AD We find the explanation for this interesting phenomenon from trade diversion story There is no evidence of product diversion of Vietnam firms to EU But, it is strongly evident that Vietnam firms significantly diverse their markets toward U.S Keywords: Antidumping, Vietnam Footwear v LIST OF FIGURES Figure 2.1 Home Import Demand Figure 2.2 Foreign Export Supply Curve Figure 2.3 Impact of tariff on import price and volume Figure 2.4 Effect of tariff on social welfare in case of large country 11 Figure 2.5 Effect of tariff on Home demand in case of small country 11 Figure 2.6 Effect of export subsidy on export country 13 Figure 2.7 Infant Industry Protection 14 Figure 2.8 Impact of reciprocal dumping on welfare 18 Figure 2.9 Conceptual framework 24 Figure 3.1 Top five Vietnamese export goods exclude oil in 2004 26 Figure 3.2.Top five footwear exporters to EU 27 Figure 3.3 EU import Vietnam AD footwear and non-AD footwear 29 Figure 4.1 Difference in Difference Method 41 Figure 4.2 Trend of export value, quantity, price of Vietnam AD Footwear and control groups to EU 44 Figure 4.3 Some main Vietnamese export goods 55 Figure 4.4 Trend of export value, quantity, price of Vietnam Non-AD Footwearand control groups to EU 64 Figure 4.5 Trend of export value, quantity, price of Vietnam Footwear and control groups to USA 70 LIST OF TABLE Table 1.1 Merchandise exports by selected economy (USA, Canada, Mexico, Brazil, Argentina, China, Japan, India, Australia and New Zealand, South Africa, Germany, United Kingdom, France, Italia) in billion USD Table 1.2 Vietnam Merchandise Trade in percent over GDP Table 1.3 Vietnam export to EU in million USD Table 3.1 EU AD on Vietnam and People Republic China Footwear 28 Table 3.2.Vietnam AD footwear export value, volume, price to US compareto control groups 30 Table 3.3.Vietnam Non- AD footwear export value, volume, price to US compareto control groups 32 Table 3.4 Descriptive Statistics of Vietnam Firms Characteristics 33 Table 3.5.Vietnam footwear export value, volume, price to US compareto control groups 37 Table 4.1.Vietnam AD footwear export value to EU compares to control groups 46 Table 4.2.Vietnam AD footwear export volume to EU compares tocontrol groups 47 Table 4.3 Vietnam AD footwear export price to EU compare tocontrol groups 48 Table 4.4 Footwear firm’s revenue compares to Apparel over period 2004-2006 50 Table 4.5 Footwear firm’s revenue compares to Apparel over period 2003-2007 51 Table 4.6.Footwear firm’s revenue compare to W.P.Tover period 2004-2006 52 Table 4.7.Footwear firm’s revenue compare to W.P.Tover period 2003-2007 54 Table 4.8.Footwear labor’spayrollcompare to Apparelover period 2004-2006 57 Table 4.9 Footwear labor’spayrollcompare to W.P.Tover period 2004-2006 58 vi Table 4.10 Footwear firm’s sizecompare to Apparelover period 2004-2006 60 Table 4.11 Footwear firm’s sizecompare to W.P.Tover period 2004-2006 61 Table 4.12.Vietnam non-AD footwear export value to EU compares to control groups 65 Table 4.13 Vietnam non-AD footwear export volume to EUcompares tocontrol groups 67 Table 4.14.Vietnam non-AD footwear export price to EU compares to control groups 68 Table 4.15 US Import value of Vietnam footwear compares tocontrol groups 72 Table 4.16.US Import volume of Vietnam footwear compares tocontrol groups 73 Table 4.17.US Import price of Vietnam compares tocontrol groups 74 Table A.1Footwear labor’spayrollcompare to Apparelover period 2003-2007 87 Table A.2 Footwear labor’s payroll compare to W.P.T over period 2003-2007 87 Table A.3 Footwear firm’s size compare to Apparel over period 2003-2007 88 Table A.4Footwear firm’s sizecompare to W.P.Tover period 2003-2007 89 vii Contents Chapter 1: Introduction 1.1 Research context and problem statement 1.2 Research objectives: 1.3 Research questions: 1.4 Research methodology, data and scope 1.5 Thesis structure Chapter 2: Literature Review 2.1 Theoretical Review 2.1.1 Market analysis in context of Trade in a single industry 2.1.2 Effect of a tariff 2.1.3 Export subsidies 12 2.1.4 Dumping 13 2.1.5 Antidumping Duties 18 2.2 Empirical Review 21 2.3 Conceptual Framework 23 Chapter 3: An overview of Vietnamese Footwear Industry 26 3.1 EU tax rising on Vietnamese footwear 26 3.2 Data Description 29 3.2.1 EU Import 8-digit (CN8) Data 29 3.2.2 Vietnam Enterprise Survey Data 33 3.2.3 US Import 10-digit (HTS10) Data 36 Chapter 4: Model Estimation and Research Findings 39 4.1 Double Difference Approach 39 4.2 Double Difference in Multiple Years 41 4.3 Estimation Impact of EU Antidumping on Vietnam Footwear Export 42 4.4 Estimation Impact of EU Antidumping on Vietnam Footwear Firms 49 4.4.1 Firm revenue 49 4.4.2 Firm size and labor payroll 56 4.5 Trade Diversion 62 4.5.1 Product Diversion 62 4.5.2 Market Diversion 68 viii Chapter 5: Discussion and Conclusion 76 5.1 Conclusion Remarks 76 5.2 Policy implications 77 5.3 Limitation and future direction 77 References 79 Appendix 83 Appendix 87 ix Chapter 1: Introduction 1.1 Research context and problem statement Trade has been growing significantly in recent decades Basic statistics given by World Trade Organization (WTO) demonstrates undoubted evidence of impressive upward trend in export and import merchandises products (Table 1.1) Consequently, international economics study is getting more and more important Some economists indicate trade as momentum of growth (Frankel & Romer, 1999; Irwin & Terviö, 2002; Wacziarg & Welch, 2008) This might be explained by some main channels Firstly, labor division could lead to efficiency gains In addition, trade growth lead to larger market; thus, firms could get more benefit from economy of scale Also, contract with foreign partners could import modern technology while competition creates more motivations to enhance skills and performance Trade openness could bring capital investment to low-capital countries as well Why trade expands? Causes of trade openness were examined by (Baier & Bergstrand, 2001; P Krugman, Cooper, & Srinivasan, 1995).They points out technology improvements, leading to cutting transportation cost and communication cost, are one of reason for trade enhancement Furthermore, governments has been changing policies which aims to more integrated instead of bounded off; for example, joining bilateral trade agreement and multilateral trade agreement; boost international trade Although, general trend of policies target to more opened for trade Nations exercise more temporary barriers such as Antidumping (AD) or technology barriers to bring up domestic producers in short-term Table 1.1 Merchandise exports by selected economy (USA, Canada, Mexico, Brazil, Argentina, China, Japan, India, Australia and New Zealand, South Africa, Germany, United Kingdom, France, Italia) in billion USD 1948 1953 1963 1973 1983 58.5 83.82 156.77 578.79 1837.563 3675.596 7376.506 17816.37 62.25 85.06 163.6 593.71 1881.53 1993 2003 2011 3785.863 7694.738 15076.52 Figure 3.3 EU import Vietnam AD footwear and non-AD footwear Source: author collected data from http://epp.eurostat.ec.europa.eu/newxtweb/ 3.2 Data Description My analysis bases on three dataset: EU import data, Vietnam Enterprise Survey and US import data This section gives a description for each dataset 3.2.1 EU Import 8-digit (CN8) Data Data for EU import footwear is retrieved from European Commission StatisticsOffice (EUROSTAT) website (http://epp.eurostat.ec.europa.eu/newxtweb/) It contains all export and import data of EU members with intra and extra partners EU here is defined as EU25 including:Belgium (BE), Denmark (DK), France (FR), Germany (DE), Greece (EL), Ireland (IE), Italy (IT), Luxembourg (LU), Netherlands (NL), Portugal (PT), Spain (ES) and United Kingdom (UK) , Austria (AT), Finland (FI) and Sweden (SE), Cyprus (CY), Czech Republic (CZ), Estonia (EE), Hungary (HU), Latvia (LV), Lithuania (LT), Malta (MT), Poland (PL), Slovakia (SK) and Slovenia (SI) In this paper, we are using 8-digit Combined Nomenclature (CN8) data since EU used CN8 code classified antidumping products.Import information on value (in Euro) and quantity (in Kilograms) are obtained Value does not include tariff, 29 freight, insurances and other surcharges I calculated price by dividing value and volume Data is available from 1999 to 2012 Table 3.2.Vietnam AD footwear export value, volume, price to US compareto control groups Obs Mean Std.dev Min Max 1999-2004 193 26559 55817.6 7.0 241902 2006-2011 193 28842 54511.3 1.3 248755 1999-2004 192 4122 9036.8 01 53158 2006-2011 192 6086 13350.7 88265 1999-2004 193 9276 21019.6 96393 2006-2011 192 16500 31545.7 5.0 149469 1999-2004 193 9559 22000.1 33.1 159676 2006-2011 193 23578 42383.0 367.5 258426 Vietnam 1999-2004 2564 1694 8832.6 191904 Apparel 2006-2011 2557 3247 10023.2 139126 1999-2004 193 22571 49698.1 319418 2006-2011 193 21164 40840.6 207291 1999-2004 192 2477 5355.5 29435 2006-2011 192 3585 8175.2 57206 1999-2004 193 9966 39275.1 426232 2006-2011 192 12139 25332.7 127433 1999-2004 193 8167 20187.2 23 155399 2006-2011 193 16728 33724.8 246 211403 Vietnam 1999-2004 2564 1554 6201.8 90419 Apparel 2006-2011 2557 3644 11874.1 234763 1999-2004 193 12.93 6.45 1.46 81.747 192 16.06 6.81 7.18 73.25 Value in thousand Euro Vietnam Thailand Indo India Thailand Indo Vietnam over Euros India in Price Quantity in 100 kg Vietnam kg Groups 2006-2011 30 Growth 8.2% 47.6% 77.8% 146.6% 91.5% -6.2% 44.7% 21.8% 104.8% 134.4% 24.1% 1999-2004 190 18.19 9.11 99 67.81 2006-2011 185 18.52 11.21 2.18 128.42 1999-2004 192 16.37 14.51 1.37 194.38 2006-2011 191 18.84 8.28 5.14 63.64 1999-2004 193 12.68 3.90 5.90 49.93 2006-2011 193 15.23 3.50 9.17 37.92 Vietnam 1999-2004 2407 15.46 17.29 07 225.07 Apparel 2006-2011 2557 15.07 15.33 09 303.03 Thailand Indo India 1.8% 15.0% 20.1% -2.5% A descriptive statistics of import value, volume and price to EU from Vietnam AD footwear, its relative from Thailand, Indonesia, and Vietnam Apparel export to EU is given in table 3.2.We take average for two period, the first is 2004 and before; the second is 2006 and after Since announcement of tax is noticed in July 2005 and AD is lifted at the end of 2011, we eliminate year 2005 and year 2012 In overall, an 8-digit product of Vietnam AD footwear export value is 26559 thousand euro in 1999 to 2004, while it is 28842 thousand euro in 2006 to 2011 That is only 8.2% increase For Thailand, growth rate is 47.6% while Indonesia record 77.8% promotion India, country that EU uses as control to assess Vietnam,goes up 146.6%.In addition, averagegrowth rate of 8-digit apparel, a similar product to footwear, is 91.5% Trend on volume is similar to value It is recorded that Vietnam AD footwear quantity falls -6.2% while the others demonstrates a significant growth In precisely, Thailand is 44.7% while Indonesia is 21.8%, India is 104.8% and 134.4% for Vietnam apparel For price effects, Vietnam AD footwear soars 24.1% and is the highest growth one On those given, general trend in 8-digit data shows Vietnam AD footwear volume and value export to EU is significantly fall in relatively with the others countries and apparel industry Instead of giving information on Vietnam-AD footwear such as table 3.2, table 3.3 reveals information on Vietnam Non-AD products and its corresponding from India, Indonesia and Thailand It is reminded that EU announce petition and raised tax on 31 lines 31 while footwear contains 75 lines of products at 8-digit level That is, 44 lines are not in list of penalty It could be seen that value export of Vietnam Non-AD footwear had increased 6.6% after duty In comparison, Thailand declines 60.8% whilea decrease of 21.8% and 0.6% are recorded to Indonesia and India respectively On the contrary to value, quantity and export price of Vietnamdrop 15.5% and 37.2% correspondingly In same period, it is observed that export quantity of Thailand and Indonesia narrow 61.3% and 35.3% but India goes 2.6% up For price, both India and Indonesia have slight increase 9.9% and 6.5% appropriately while Thailand reduces a small number 5.3% Table 3.3.Vietnam Non- AD footwear export value, volume, price to US compareto control groups Groups Value in thousand Euro Vietnam Thailand Indo India Quantity in 100 kg Vietnam Thailand Indo India Obs Mean Std.dev Min Max 1999-2004 280 22675.4 49214.1 253894 2006-2011 279 24176 52882.2 10 303368 1999-2004 286 3576.8 10072.3 13 75904 2006-2011 264 1400.3 3739.6 04 27466.3 1999-2004 277 7308.8 17010.0 11 119344 2006-2011 266 5716.2 13882 01 127025 1999-2004 268 5863.8 30064.3 01 257844 2006-2011 274 5827.6 25441.9 201102 1999-2004 280 26922.0 63162.5 521117 2006-2011 279 22747.2 52875.1 350310 1999-2004 286 2929.5 7092.4 50717 2006-2011 264 1132.0 2861.5 20340 1999-2004 277 6256.7 17018.1 203249 2006-2011 266 4048.1 9938.1 89584 1999-2004 268 3066.4 10930.4 81785 2006-2011 274 3146.3 10244.9 68153 32 Growth 6.6% -60.8% -21.8% -0.6% -15.5% -61.3% -35.3% 2.6% Price in Euros over kg Vietnam Thailand Indo India 1999-2004 266 2.18 10.26 07 119.44 2006-2011 272 1.37 98 27 10.59 1999-2004 269 1.52 2.36 07 36.88 2006-2011 244 1.44 91 13 7.02 1999-2004 264 1.53 1.59 06 15.73 2006-2011 250 1.63 1.27 05 9.17 1999-2004 255 1.21 84 09 8.08 2006-2011 268 1.33 64 33 4.92 -37.2% -5.3% 6.5% 9.9% 3.2.2 Vietnam Enterprise Survey Data To evaluate impact of AD on Vietnam footwear firm, we employ panel Vietnam Enterprise Survey The dataset is collected by Vietnam General Statistics Office (GSO) and its provincial sub-institution First, this paper uses panel data of two years 2004 and 2006 Survey of 2004 has 91755 observations while Survey 2006 has 131347 firms It has 329 footwear firms are observed in 2004 And, there are 369 occurrences of treatment in sample of 2006 Samples include data of firm’s revenue, labor information, capital information, etc For robustness, we enhance data sample by include two years 2003 and 2007 to our sample One obstacle occurs when combine data of 2006, 2007 with 2003 2004 As Survey is collected base on Vietnam business category which is changed in 2006, then we must concord code of year 2006 and year 2007 with code of 2004 and 2005 Table 3.4 Descriptive Statistics of Vietnam Firms Characteristics Year Variables Groups No.obs Mean 2003 Revenue Footwear 242 95028.78 327708.6 52 3943890 Apparel 938 24044.61 77079.69 1316961 W.P.T 3009 20334.77 71681.73 1316961 Footwear 242 12.04516 7.937063 738 66.72803 Apparel 938 20.59294 177.8277 7717391 5382 W.P.T 3009 15.34298 111.246 5382 Payroll 33 Std.dev Minimum Maximum 2686567 Capital Labor Female Footwear 242 74654.9 268199.3 45 Apparel 938 18255.15 53086.77 14 768595 W.P.T 3009 19509.39 87107.9 2855756 Footwear 242 1489.273 3249.786 35670 Apparel 938 389.2548 679.0427 8255 W.P.T 3009 211.8637 513.3392 8255 Footwear 242 6859709 2248341 0444444 9959759 Apparel 938 7641833 1729499 0547325 W.P.T 3009 5335977 2800754 0166667 Footwear 273 103808.5 378766.1 47 4751425 Apparel 1257 23173.86 83521.58 1585163 W.P.T 3728 20805.24 76363.61 1599798 Footwear 273 14.81947 44.94031 1.142857 743 Apparel 1257 14.47494 29.48815 1538462 770 W.P.T 3728 12.62041 18.84826 03 770 Footwear 273 84360.9 4414062 Apparel 1257 16826.67 47452.87 17 795327 W.P.T 3728 20081.02 108488.2 12 4045236 Footwear 273 1558.593 3738.545 49756 Apparel 1257 353.9189 675.5627 9066 W.P.T 3728 201.5038 505.228 9066 Footwear 273 6845739 2211628 1428571 9842958 Apparel 1257 7579362 1658834 05 W.P.T 3728 5428962 2752946 0121951 Footwear 314 123389.1 468347.7 6542360 Apparel 1313 28708.39 101608.9 15 1727660 3704402 Ratio 2004 Revenue Payroll Capital Labor Female 302414.8 159 Ratio 2006 Revenue 34 Payroll Capital Labor Female W.P.T 4426 29657.46 323334.2 2.00e+07 Footwear 314 15.39481 10.17462 9179105 94.11111 Apparel 1313 17.56942 23.5563 469.125 W.P.T 4426 16.01926 17.85883 469.125 Footwear 314 94839.54 342841 18 4939283 Apparel 1313 19696 60029.27 20 1027198 W.P.T 4426 22799.54 151294.6 7996444 Footwear 314 1520.659 4043.7 53821 Apparel 1313 371.8111 697.1979 7276 W.P.T 4426 187.6685 467.4501 7276 Footwear 314 7009652 2106877 15 Apparel 1313 7615461 167062 W.P.T 4426 5404974 2770157 0151515 Footwear 391 114519.4 459560.4 28 7185716 Apparel 2013 24369.41 93679.04 14 1925378 W.P.T 6320 23381.16 129121 6866813 Footwear 391 19.23006 26.37561 2562845 478.1 Apparel 2013 19.68752 17.03964 317 W.P.T 6320 17.94542 15.89243 381.3333 Footwear 391 85872.1 4973166 Apparel 2013 16003.98 47900.05 12 995232 W.P.T 6320 18974.25 127354.4 8156952 Footwear 391 1390.427 3930.248 55468 Apparel 2013 298.2812 692.263 9799 W.P.T 6320 152.804 458.0903 9799 Footwear 391 6791568 2134986 0506329 4237288 Ratio 2007 Revenue Payroll Capital Labor Female Ratio 35 325164 078125 76 Apparel 2013 717194 171154 0714286 W.P.T 6320 5224489 2598486 0108108 We are not using all business category of Survey but we uses only apparel products as control group and footwear as treatment group This Survey is constructed based on SITC 4digit Thus, we use footwear as proxy for firms under AD For robustness, we change control group by enhancing control group totextile, paper & wooden products.Data description of variables related to our analysisis demonstratedin table As given in table, we can see mean, standard deviation, maximum, minimum and number of observations of each group over years 2003, 2004, 2006 and 2007 Revenue, Payroll is measured in millions of Vietnam Dong in one year; capital is measured in millions of Vietnam Dong Female ratio is calculated by fraction of number of female employee over total employees Firm‘s size represents for labor There are three groups, one treatment and two controls Footwear implies footwear firms while Apparel indicates enterprises works in apparel sectors The word W.P.T is acronym of wood and wooden, papers and textiles products 3.2.3 US Import 10-digit (HTS10) Data US import 10-digit (hts10) data is collected from US international trade commission website (at http://dataweb.usitc.gov/) Import and export from all countries to and from US are recorded by the commission We are using import data which is categorized by Harmonized Tariff Schedule number.Data at 10-digit level is available and it is smallest unit, hence, we will adopt this for our research Values are disclosed in thousand US dollars, the quantities are reported in units The units depend on lines of product For example, some lines of footwear are measured by dozen while some measured in kilograms Price mentioned in table is average price and is measured by USD per unit Although, there is difference in unit, table 4.4 demonstrates a description of US import data In overall, average export value of Vietnam footwear export increases 629.6% while its volume accelerates 422.8% It is only Vietnamese apparel has same speed with 657.8% and 483% respectively to value and volume It is also recorded that India footwear has considerably promotion of 36 63.7% and 38.2% corresponding to the twos On the contrary, Indonesia and Thailand report a 35% fall in value and 30% in quantity for each country In another view, price of Vietnam footwear, Thailand, Indonesia, India and even Vietnam apparel have same trend in rising with 66.9%, 52.7%, 75.2%, 81.9%, 70.4% respectively to each group Table 3.5.Vietnam footwear export value, volume, price to US compareto control groups Quantity in 1000 Units Value in thousand USD Groups Obs Mean Std.dev Min Max Vietnam 1996-2004 3834 437.1 3363.2 73491.9 Footwear 2006-2011 2556 3189.7 17878.5 294644.7 1996-2004 3744 773.0 3917.7 64392.8 2006-2011 2496 484.6 2707.4 52683.1 1996-2004 3780 1820.6 10281.3 122866 2006-2011 2520 1216.2 7427.4 10831.1 1996-2004 3420 280.4 2998.6 61967.7 2006-2011 2280 459.09 4108.7 81569.2 Vietnam 1996-2004 1485 403.69 4937.4 270285.3 Apparel 2006-2011 9906 3059.5 20105.5 738191.1 Vietnam 1996-2004 3834 37.15 273.1 5769.5 Footwear 2006-2011 2556 287.0 1427.9 19986.4 1996-2004 3744 66.60 304.9 5224.5 2006-2011 2496 37.41 202.1 3849.0 1996-2004 3780 175.5 920.2 16660.9 2006-2011 2520 106.8 659.2 10831.1 1996-2004 3420 19.94 190.5 3937.4 2006-2011 2280 27.55 226.9 5210.1 Vietnam 1996-2004 14859 16.63 278.99 18119.7 Apparel 2006-2011 96.96 738.78 23785.4 Thailand Indo India Thailand Indo India 9906 37 Growth 629.6% -37.3% -33.2% 63.7% 657.8% 422.8% -33.7% -28.3% 38.2% 483% Price in USD over Unit Vietnam 1996-2004 1033 11.58 11.00 004 127 Footwear 2006-2011 1217 19.33 77.34 054 2252.3 1996-2004 1003 11.71 14.29 04 284 2006-2011 1069 17.88 33.89 129 488 1996-2004 1462 11.29 15.37 35 268 2006-2011 1003 19.78 74.98 39 2117 1996-2004 1009 12.96 17.52 300 2006-2011 909 23.57 48.06 13 805 Vietnam 1996-2004 4109 64.90 110.2 012 2908 Apparel 2006-2011 6021 110.6 174.4 06 3084 Thailand Indo India 38 66.9% 52.7% 75.2% 81.9% 70.4% Chapter 4: Model Estimation and Research Findings 4.1 Double Difference Approach This research applies Double Difference (DD) method to estimate effects of antidumping (AD) footwear DD measures impacts of a policy by comparing treatment and control group over time of before and after intervention Let separate ex-ante and ex-post period by variable YEAR_t which is equal to or respectively for the two periods Thus, YEAR_t controls for year fixed effects It includes exchange rate effects, inflation effects, etc, in general, it represent for macroeconomics factors changes over period of before and after tax rising YTt and YCt are outcome of interest of treatment and control group, for example revenue, profit, cost, labor payroll, firm size,etc, in year t According to (Khandker et al., 2010), effect of AD could be seen as DD = E(YT1 – YC1|T1 =1) – E(YT0- YC0|T0 = 0) (4.1) Where T1 =1 stands for “named” AD group after intervention while T0 =0 represents for “non-named” AD group This DD assumes unobserved heterogeneity is time-invariant As describes in (1), it is E(YT0- YC0|T0 = 0), and is eliminated in DD formula This assumption is weaker than assumption of conditional erogeneity However, it is better than before-after method since it can eliminate time-invariant bias DD regression could be demonstrated as Yit = α + β*Ti1*YEAR_t + 𝜌 ∗ 𝑇 i1+ 𝜔 ∗ 𝑌𝐸𝐴𝑅_t + εit (4.2) Substitute T1 = and T1 = into (4.2), E(YT1 – YC1|T1 =1) = (α + β + 𝜌 + 𝜔) - (α + 𝜔) E(YT0- YC0|T0 = 0) = (α + 𝜌) – α As such, equation (4.1) could be equal to DD = (α + β + 𝜌 + 𝜔) - (α + 𝜔) - [(α +𝜌) – α] = β (4.3) 39 On these given, DD is combination of YEAR_t and treated group In other words, Coefficient β is interpreted as the effect of policy on year t on individual i of group T In addition, one of most important assumption for DD methods is Cov(T i1*YEAR_t,εit) = That is, bias is time-invariant To satisfy this assumption, control group should have the common characteristics with the “treatment” group Besides that, Difference-In-Difference model might be modified as (Brambilla et al., 2012) LnYit = α + Ai + β*Ti*YEAR_t + 𝜌 ∗ 𝑇i+ 𝜔 ∗ 𝑌𝐸𝐴𝑅_t + 𝛿*lnxit + εit (4.4) xit represents for the vector of individual’s characteristic such as firm‘s age, firm‘s size and firm’s capital per employee, location of firms, etc which changes over time Ai is fixed effects of individuals By adding individuals characteristics and individuals fixed effects, we can control for observed biases An illustration of DD method could be seen as figure 11 We reveal case of Appling DD method to measure effect of Antidumping Duty (AD) on revenue of Vietnam footwear Firm Let divide time period of before and after intervention At beginning, it is assumed enterprise’s revenue of Vietnam Footwear Firms is Y iAwhereas YiB is revenue of control group After AD, revenue of footwear and Apparel are YiA2 and YiB1 respectively 40 Figure 4.1 Difference in Difference Method Tải FULL (99 trang): https://bit.ly/3JOQnje Dự phòng: fb.com/TaiHo123doc.net YiA1 is expected revenue of footwear enterprise without AD which is never observed in practice DD approach assumes (YiA – YiB) is equal to (YiA1 – YiB1).Thus, effect of EU AD on Vietnam footwear firm’s revenue is: (YiA2 – YiA) – ( YiB1- YiB) This can derives similarly to evaluate effect of AD on footwear firm in: profit, labor payroll, and firm’s size, etc 4.2 Double Difference in Multiple Years Model (4.4) could be generalized for multiple years as described in (Blanchflower, Oswald, & Sanfey, 1996) 41 LnYit = α + Ai + β*Ti*YEAR_t+𝜔_𝑡 ∗ 𝑌𝐸𝐴𝑅_t + 𝛿*lnxit+ εit (4.5) YEAR_t stand for year fixed effects There is a little difference between value of YEAR_t in (4.5) and in (4.4) Instead of having only two values and as in (4.4), in (4.5) YEAR_t is range of years that have data fulfill We take first difference for both left and right hand site of equation Source of time-invariant heterogeneity is different out as (Ai – Ai) that is equal to zero Xit represents for the control of time-variant individuals characteristics while 𝑌𝐸𝐴𝑅_t controls for year fixed effects As such, β is estimation of influence of policy on outcome of interest Yit We customize 4.5 to our research We adjust covariate β*Ti*YEAR_t to be β*Ti*AfterAD_t AfterAD_t have only two values and respectively for before and after policy intervention We also add control for country fixed effects Countrys To compare Vietnam footwear with other countries, 4.5 could be rewritten as Ai is control for industry fixed effect Tải FULL (99 trang): https://bit.ly/3JOQnje Dự phòng: fb.com/TaiHo123doc.net LnYst = α +Ai+ Countrys+ ω_t*YEAR_t + β * Countrys* AfterAD_t + δ*Xst + εst (4.6) Besides that, to make our results stronger, we also run regression for only VN industries as described in 4.6b Footwear is treatment; other industries are control LnYit = α + Ai+ ω_t*YEAR_t + β * Industry_i * AfterAD_t + δ*X_it + εit(4.6b) Industry_i is dummy variable control industry which is equal to if industry is footwear; otherwise it takes value of zero 4.3 Estimation Impact of EU Antidumping on Vietnam Footwear Export To evaluate influence of EU AD on Vietnam footwear Export at industry level, we employ equation4.6 with a slight adjustment To assess AD effects on value import 4.7 is modified as LogValueist= α + Ai+ Vn+ β*ddVN+ 𝜔_𝑡 ∗ 𝑌𝐸𝐴𝑅_t +εit (4.7) 42 LogValueist is logarithm of value import to EU in industry i from country s in year t Vn is country-fixed effects That is, it will take value of one for Vietnam and for the others ddVNis binary variable which is interaction of industry i and country s (Tis ) and AfterAD_t Whereas, Tis is equal to if industry is in EU “named” AD list and from country Vietnam, otherwise it is zero YEAR_t, AfterAD_t, εit are defined as 4.7.In equation 4.8, 4.9, 4.10, ddVN takes role of DD variable Ai is industry time-invariant fixed effects A similar equation with 4.8 is applied to evaluate impact of AD on quantity export to EU from VN LogQuantiyist= α + Ai + Vn+ β*ddVN+ 𝜔_𝑡 ∗ 𝑌𝐸𝐴𝑅_t + εit (4.8) LogQuantiyist represents for log of quantity import to EU in industry i from country s in year t This research also verifies impact of EU AD on price of AD footwear from Vietnam This is reflex in equation 4.10 LogPriceist= α + Ai + Vn+ β*ddVN+ 𝜔_𝑡 ∗ 𝑌𝐸𝐴𝑅_t+ εit(4.9) LogPriceist stands for log of price import to EU in industry i from country s in year t In short, a summary for variables and their definitions was illustrated in table1 of Appendix A Figure4.2 describes information of Vietnamese AD footwear, Thailand, Indonesia, India, and Vietnam Apparel export to EU The terms Thailand, Indonesia, India indicates footwear of those countries corresponding to Vietnam AD footwear We review the trend of those groups on log of value, volume and price before 2004 to choose control group As given graphs, India is group that the most close to Vietnamese footwear in period 1999-2004 in value, quantity and price Also, it is country, which EC used as control to evaluate claims on Vietnam footwear price For value, Thailand footwear export has felt down since 2007 It might come from politics instability after a prime minister was overthrown in Sept 2006 Period 2001-2004 revealed a significant decline of Indonesia, Thailand and Vietnam Apparel value in comparing to treatment group For quantity, Indonesia has risen rapidly from period 200-2002 before falling down quickly in 2002-2004 while Thailand, again, down significantly after 2007 For Price, Indonesia and Vietnam Apparel expose notably drop in 43 6677557 ... in Multiple Years 41 4.3 Estimation Impact of EU Antidumping on Vietnam Footwear Export 42 4.4 Estimation Impact of EU Antidumping on Vietnam Footwear Firms 49 4.4.1 Firm... According to Vietnam General Statistics Office (GSO) EU imposes tax on bicycles in 2004 EU is one of main partners of Vietnam besides US, China and Asia As mentioned in table 1.3, export of VN to EU increases... their profit 25 Chapter 3: An overview of Vietnamese Footwear Industry 3.1 EU tax rising on Vietnamese footwear Footwear is one of largest contributors to export of Vietnam As given data by Vietnam