JED, Vol. 20, No.2, August 2018, pp. 50-64
A Stochastic Analysis of Vietnam Bilateral Trade Efficiency
Abstract:This paper used a stochastic frontier gravity model to evaluate the bilateral trade efficiency of
Vietnam using the bilateral trade data of Vietnam’s main trade counterparts in the period 2000-
2015. Trade efficiency means the actual trade in comparison with the trade potential. Empirical
results show that Vietnam’s trade performance was significantly lower than the potential level.
Joining the WTO did not improve trade efficiency. The impact of FTAs on exploiting bilateral
trade potential is heterogeneous across counterparts.
Keywords:Stochastic frontier gravity model; trade potential; free trade agreement