(Tiểu luận) specialized projectthe role of comparatve advantage invietnam’s export period 2010 2019

NATIONAL ECONOMICS UNIVERSITY FACULTY OF ECONOMICS  SPECIALIZED PROJECT THE ROLE OF COMPARATVE ADVANTAGE IN VIETNAM’S EXPORT PERIOD 2010-2019 Tutor : PGS TS Nguyễn Việt Hùng Student : Lê Hồng My Student ID : 11202618 Class : Financial Economics 62A Grade : 2020 – 2024 Hanoi, 2022 Table of Contents CHAPTER I INTRODUCTION 1.1 Research rationales 1.2 General objectives 1.3 Specific objectives 1.4 Scope of the study 1.5 Research structure CHAPTER II LITERATURE REVIEW 2.1 Theoretical basis of comparative advantage 2.1.1 The Classical Theory of Comparative Advantage by David Ricardo 2.1.2 Comparative advantage under the H-O model 11 2.2 Comparative advantage of Balassa index RCA 12 2.2 Vietnam in the current development context .15 2.2.1 Vietnam's comparative advantage in the process of international economic integration 15 2.2.2 Developing commercial partners 16 2.3 Vietnam's comparative advantage .18 CHAPTER III DATA AND METHODOLOGY .21 3.1 Data source (s) 21 3.2 Methodology 21 3.3 Empirical model 22 CHAPTER IV FINDING AND ANALYSIS .24 4.1.Comparative advantage to develop Vietnam external economy 24 4.1.1 Rice production and export .24 4.1.2 Raising and processing catfish 26 4.2 Status of comparative advantage in Vietnam 28 4.2.1 About natural advantages 28 4.2.2 About domestic conditions advantages 30 4.3 Status of comparative disadvantage in Vietnam 30 4.3.1 About natural disadvantages .30 4.3.2 The disadvantage of domestic conditions 31 CHAPTER V CONCLUDING REMARKS AND POLICY RECOMMENDATIONS .33 5.1 Major finding 33 5.2 Policy recommendations 33 5.3 Concluding remarks .34 5.4 Limitations of the study 35 REFERENCES .36 LIST OF ACRONNYMS APEC: Asia-Pacific Cooperation Organization ASEAN: Association of Southeast Asian Nations VGC: Global Value Chain OECD: Organization for Economic Cooperation and Development RCA: Revealed comparative advantage index SITC: International Trade Standard Classification USD: US Dollar VEPR: Institute for Economic and Policy Research WTO: World Trade Organization LIST OF TABL FIGURE TABLE 1:RCA INDEX OF INDUSTRY GROUPS ACCORDING TO SITC CRITERIA LEVEL .19 TABLE 2: DESCRIPTION OF VARIABLES .21 TABLE 3: EXPECTED SIGN OF VARIABLE EFFECT .23 TABLE 4: RICE EXPORT MARKETS IN 2017 AND 2018 26 FIGURE 2: CATFISH EXPORT MARKET SHARE BY COUNTRY 27 FIRGUE 3: PANGASIUS IMPORT MARKET STRUCTURE IN 2018 (GT) AND PANGASIUS EXPORT VALUE IN 2014-2018 27 Y CHAPTER I INTRODUCTION 1.1 Research rationales In the current economy, the process of international economic integration is always associated with trade liberalization… In 1995, Vietnam officially became a member of the Association of Southeast Asian Nations (ASEAN); in 1998, Vietnam joined the Asia-Pacific Cooperation (APEC); signed the Vietnam-US Bilateral Trade Agreement in 2000 and joined the World Trade Organization (WTO) in 2007 so this brings many opportunities for Vietnam To be able to seize opportunities as well as overcome difficulties in order to improve the efficiency of the economic integration process and expand external economic relations, Vietnam need to improve a foreign economic development strategy long-term and sustainable Export of goods together with attracting foreign investment have shown the driving role of economic growth, properly shown in choosing economic development strategy Among economic theories, trade theory is considered to be the most developed and logically systematic with each other These theories are a system of theories from low to high, from simple to complex, the latter theory always inherits and develops from the previous theory and is increasingly scientific, closer and closer to each other Practice Especially the theory of comparative advantage, it is the root of international trade, is a factor to promote economic development (Paul R KrugmanMaurice Obstfeld: International Economics - Theory and Politics book; volume I, Issues of International Trade) The principle of comparative advantage, arising from technological differences and factor ratios, was originally developed to account for the rationale in international trade and to predict trade patterns due to changes in the resource element Therefore, a country should export goods that are abundant and import goods that are scarce Vietnam is a country with low production costs and a labor force with a good level of technical skill and experience seems to be a comparative advantage in terms of products that require the use of labor factors This study examines the impact of the application of comparative advantage in exports on the value of Vietnam's exports This study first examines how the advantage of applying comparative advantage will have a positive impact on the value of exports to the main partner countries Second, this study argues that developing countries should use the existing comparative advantage index to assess Document continues below Discover more from: P_LV4 Project Đại học Kinh tế… 265 documents Go to course W05B - 123123 Project 100% (5) ĐỀ CƯƠNG ÔN TẬP 18 PHÁP LUẬT ĐẠI… Project 29 100% (4) Đề thi gồm câu hỏi : 1.Lựa chọn đún… Project 100% (4) PR innisfree - Nhóm 20 - nhóm mơn pr Project 100% (3) Phân tích thơ Viếng lăng Bác Project 100% (2) W05 - 123 Project 83% (6) the sectors that are Vietnam's advantage in international trade and point out the limitations When using this index to specialize in industries, how does it adversely affect the industry structure of a country Finally, it is possible to see the sectors that are beneficial and suitable for Vietnam today, which can adjust the proportion of Vietnam's export industries accordingly 1.2 General objectives The main object of this project is to study the effect of comparative advantage to develop Vietnam's export The main question can be stated as follow: “ In the context from 2010 to 2020, is comparative advantage the answer to Vietnam's export growth?” 1.3 Specific objectives The following sub-question will be addressed to give more details on the general objectives: “How affect the comparative advantage to develop Vietnam's export?” “ What is export pattern of Vietnam ?” 1.4 Scope of the study The content of the study points out the importance of comparative advantage, absolute advantage, from the analysis of comparative advantage and absolute advantage, what can be drawn for the Vietnamese economy, especially in the context of economic growth In today's integration situation, how to apply those theories to bring high efficiency This study clearly analyzes the current situation of comparative advantage and absolute advantage being used in Vietnam's external economy And then provide orientations as well as solutions to take advantage of comparative and absolute advantages in the most reasonable way to develop Vietnam's external economy Since Vietnam’s reform and opening up for integration at the regional and global scale, there have been many achievements in integration policy as well as export promotion policy, increasing foreign currency sources for the country, contributing to the country’s economic growth part in the cause of building a solid foundation for socio-economic development With geographical advantages and similarities in culture – economy – society, Vietnam has opportunities to promote export goods to Asian and European countries This study focuses on Vietnam's export activities to 10 countries that are major trading partners of Vietnam Specifically, these countries include China, Japan, Korea, Thailand, India, Hong Kong, the USA, the UK, Germany, Netherlands The policy of opening the economy in 1986 brought Vietnam's economy into integration with the world economy Vietnamese goods are quickly available in many countries around the world, and the growth rate of exports has increased continuously over the years With the advantage of labor costs and low translation, costs have created a competitive advantage for products made in Vietnam Low-cost types have also encouraged direct investment in Vietnam, contributing to an increase in exports The research was carried out over a period of years starting from 2010 We chose the starting time of 2010 after the Great Recession took place and the ending time being 2019 before the Covid-19 pandemic devastated the world economy to have the most objective view 1.5 Research structure The topic is divided into major chapters as follows: Chapter Introduction Chapter Literature review Chapter Data and methodology Chapter Finding and analysis Chapter Concluding remarks and policy recommendations CHAPTER II LITERATURE REVIEW 2.1 Theoretical basis of comparative advantage 2.1.1 The Classical Theory of Comparative Advantage by David Ricardo Adam Smith's theory of absolute advantage shows that if a country has an absolute advantage over another country in a good, that country will benefit from foreign trade if it specializes in production to its absolute advantage However, just relying on the theory of absolute advantage does not explain why a country has an absolute advantage over another country, or a country without an absolute advantage can still participate and collect profits benefits in the process of international cooperation and division of labor to strongly develop international trade activities To overcome the limitations of the theory of absolute advantage and also to answer the above question, in 1817, in his famous work "Principles of Political Economy", the classical economist Englishman David Ricardo proposed the theory of comparative advantage to explain more generally, more precisely, the emergence of interests in international trade The basis of this theory is D.Ricardo's thesis about the differences between countries in terms of natural conditions, quality of human resources and production conditions; Any country can find this difference and specialize in the production of certain products with or without advantages in terms of nature, climate, workmanship D.Ricardo said that, in fact, the absolute advantage of each country is not much, moreover the reality shows that most countries conduct trade with each other not only in goods with absolute advantages but also in goods with absolute advantages also for goods based on comparative advantage By specializing in the production of certain types of its products in exchange for imports through foreign trade, each country not only reaps certain benefits, but also allows its people to consumer country beyond the limits of its production capacity Ricardo's theory of comparative advantage includes the following assumptions: (1) Two countries, two products to trade; (2) A factor of production is labor, the value of goods is calculated according to labor;