Promoting the export of textiles and garments the case study of vietnam

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY =====()00 MASTER THESIS PROMOTING THE EXPORT OF TEXTILES AND GARMENTS: THE CASE STUDY OF VIETNAM Course: Master of International Trade Policy and Law NGUYEN HOANG Hanoi - 2021 SON MINISTRY OE EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS PROMOTING THE EXPORT OF TEXTILES AND GARMENTS: THE CASE STUDY OF VIETNAM Code: 8310106 Course: Master of International Trade Policy and Law Student’s code : 1906060212 Student's name: NGUYEN HOANG Assoc.Prof, Dr Hoang Xuan Binh Hanoi - 2021 SON ACKNOWLEDGEMENT I wish to take this opportunity to thank all the people who have helped me during the time of accomplishing this research Without the help, support, and motivation, this thesis would not have been possible First and foremost, I would like to express my deep gratitude to my lecturer and supervisor, Assoc.Prof, Dr Hoang Xuan Binh, for his precious advice and encouragement throughout the research Without his encouragement, this study would not have been feasible I would also like to give my sincere appreciation to all lecturers and officers in the Faculty of Postgraduate Studies and Faculty of International Economics, Foreign Trade University, Hanoi Last but not least, special thanks to my fellows, who have remained my trusted source of support through times Sincerely, Hanoi, 2021 Nguyen Hoang Son TABLE OF CONTENTS \0.919À.40).60./10 60 IV.3;)023/9)0609)090 61135 aäỪ il LIST OE ABBREV LA TIONS 5-5 e>ss+ CHAPTER2 PIN 0i81i6)10i0 An LITERATURE ao REVIEW 2.1.1 Definition ofexport activity and eXpOort turnOVeT 2.1.2 The concept oŸ€XpOTt aCfIVIẨV 2525222222222 *2E+EzEzEzerrrerrrreree 2.1.3 _ The role OŸ€XpOFS 2525252222 2ES2E2E2E2E2EEEEEEeEErrrrrrrrreree 2.2 2.2.1 International trade theories eeecececeeecececeeeeeeeeeeseseseseseseseseseeeeteeesees 10 The Heckscher-Ohlin theory and revealed comparative advantage 10 2.2.2 Theorles ofgravity model ¿ + +52 5s++s+++s+z+zzzzzxzezezereezxree 11 PIN ?uoðc ca 13 1H 2.3.1 _ The foreign research of the factors affecting export . 13 2.3.2 _ The domestic research ofthe factors affecting export 15 2.3.3 Overview of experimental foreign and domestic studies 17 CHAPTER RESEARCH E3 3.2 METHODS .Ẳ 2222225 S2 SE cz szxczcrcreerec 23 he 23 Qualitative research methods -+2 +5 szs+zz£+zSzzSzzczzczxczzczczrccec 24 3.2.1 Classification and systematizatlon ofthe theory method 24 3.2.2 _ Analysis-synthesis method + + 25252 ++2+++x+z+zzzzzxzezezereezxree 24 3.2.3 Descriptive statistics method -¿2-25 5+2+2+z+zzzzzxzezrerersxree 25 3.2.4 9u 3.2.5 Quantifative research method using the panel data model 25 5ê ad 25 3.2.5.1 Research model +-+c+z+zxrererrrrrrrrrrkrrkrrrrrrrrrrrrree 26 3.2.5.2 Methods of estimating the panel data regression model 28 3.2.5.3 Model selection test theOTIS -5252>c+e+e+ezesereeerrrrs 30 3.2.5.4 Defects ofthe regression model 5252 5s+s+s++e>zszsssz 31 3.3 .cóo CHAPTER 4.1 ca RESEARCH 32 RESULTS AND DISCUSSIONS 35 Overview of Vietnam textile and garment export acfIvities 35 4.1.1 _ The structure of garments and textiles products in export 35 [1P KH0laiaIẮIẮẰẮẰẮẰAŨ 36 TP Hỗui 44 38 41.2.3 Garment nh 39 4.1.2 Overview of Vietnam textile and garment eXpOoFfs 40 4.1.3 _ Factors affecting Vietnam textile and garmenft eXpOrts 42 4.1.2.1 Factors affecting supplÌy -¿5+2 s2 +2 s2x+xzezrerersrrrrreres 42 4.1.2.2 Factors affecting demand + + 225252 ++S+S+E£z£z£+z+x+ezezzerx 48 4.1.2.3 Factors hindering or afttracting International trade 49 4.2 Research result s ÔỎ 53 4.2.1 Data description eeceeeceecescecesceseceseeceseeceseeceeceseeeeaeeseseeseeesceeeeees 53 4.2.2 Descriptive statistics of variables cccccecceceeeeeseseeeeeeseseseeeeeees 55 iv 4.2.3 4.3 0U h— Testing the ft and type of model 2-2 + + ++s+s+++zzxzxzezzzzxzxzzzre 58 “¬ ' 4.3.2 Hausman test 43.3 Test the fit of the model 44 56 Y.^ 58 59 Defects in the model AA MulticollinearIfy . - - 2:22 2222232322222 EEEErxrrrrrrrrrerer 59 44.2 HeteroscedasfiCIfy S22 2222x222 21212111111 re 60 4.5 Research model s+++z+z+x+xrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrree 60 4.6 Comparison to the research results to previous studies - 62 CHAPTER CONCLUSIONS ¿090000 5.2 AND POLICY IMPLICATIONS 67 .5 67 Policy Impli€afIOIS - ¿+5 222222 S23232E22E2E2E2E E221 rErrrrer 67 5.2.1 Based on the GDP per capifa of Vietnam . 5555252 s+sss2 67 5.2.2 Based on the GDP of1mporting counfries - 5555252525552 68 5.2.3 Based on the population growth rate of the Importing counfry 69 5.2.4 Based on the real exchange rate between VND and import currency 5.3 Limitations and further research direCfIO'4 -5-5-55s+s+s+s+s+s+ 70 5.3.1 Thesis limitations eecececececececeeseseeeseseseceseseeeeeeeseeeeeeeeeeeeeeseeeees 70 5.3.2 _ Further research directiOns -+-+c+zerrerrerezerxee 71 (0 9) 0001/90) A4 REFERENCES APPENDIX 74 LIST OF ABBREVIATIONS GDP Gross Domestic Product RCA Revealed Comparative Advantage CMT Cut the fabric, Make the garments, Trim the garments CAGR Compounded Annual Growth rate GLS Generalized least squares OLS Ordinary Least Square REM Random Effects Model FEM Fixed effects model USD United States dollar RCA Revealed Comparative Advantage H-O Heckscher-Ohlin FDI Foreign Direct Investment WTO World Trade Organization EU European Union NAFTA | North American Free Trade Agreement ASEAN _| Association of Southeast Asian Nations APEC Asia-Pacific Economic Cooperation SITC Standard International Trade Classification OIC Organization of Islamic Cooperation RTA Regional trade agreements VND Vietnam Dong FTA Free trade agreements LM Lagrange Multiplier accreditation VI VIF Variance Inflation Factor IMF International Monetary Fund UN United Nations UNCTAD | United Nations Conference on Trade and Development OE Omissions Excepted US United States Covid-19 | Coronavirus disease of 2019 EFTA European Free Trade Association EVFTA _ | European-Vietnam Free Trade Agreement CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership EAEU Eurasian Economic Union VN Vietnam HS Harmonized Commodity Description and Coding System Vii LIST OF FIGURES Figure 3.1: Research procedure of the theS15 . + 252525252 *+2+2£z£+z+E+eze>zezx 23 Figure 4.1: Vietnam textile and garment export value in the period 2000-2020 41 Figure 4.2: The largest textile and garment import markets of Vietnam 42 Figure 4.3: Ranking on E-Government index of Vietnam and ASEAN - 45 Figure 4.4: Vietnam personal spending Index - 252525252 s+szz£z>+z+zzzzz>z=zx 47 Figure 4.5: LPI of Vietnam and the largest textile and garment partners 50 Figure 4.6: Logistics costs per GDP of some countries in 2018(%) 51 vill LIST OF TABLES Table 2.1: Summary of experimental research resuÏfs . 55252 5ss+s+s+s>s5+ 32 Table 4.1: Vietnam textile and garment industry labor force during 2017-2020 .43 Table 4.2: Vietnam FTAs till May 2021 -+52 52 5252 S2*2E2E££+EzEzEzExzxzxzxrerre 51 Table 4.3: Observation, average value, standard deviation, minimum value maximum value of each varIable -2-2222 +2 +22 S+S+z£+E+E+E£zE+EEzE+Ezzzzzzzcrzcr sec 55 Table 4.4: Results of OLS, REM, and FEM models on the impact of factors on Vietnam textile and garment export at the first test 20 eeeeeeeeeeeeeeeeeeeeteteteeeeee 56 Table 4.5: Results VIF values of the variables In the mode -5 5- 57 Table 4.6: Results of OLS, REM, and FEM models on the impact of factors on Vietnam textile and garment export at the second test - 5555552 57 Table 4.7: Results VIF values of the variables In the mode -5 5- 59 Table 4.8: Results of the suitable FEM -2-2 5222222222 £+2£zE+E£zEzEEzEzzzzzezezxczxe 60 Table 4.9: Comparison with previous foreign sfudies - 252 525+s+ssss