Patterns and Dynamics of Vietnam’s Revealed Comparative Advantage and Export Specialization

Abstract:This paper takes investigation into the patterns and dynamics of Vietnam’s revealed com- parative advantage and export specialization. Using various analytical tools, the empiri- cal findings are established as follows. First, Vietnam’s exports are dominated by unskilled labor and agricultural resource intensive products. Second, between 2001 and 2009, there has been an overall improvement in Vietnam’s RCA indices. Third, the pattern of Vietnam’s revealed comparative advantage has converged. Fourth, there is a relatively low degree of mobility among industries, which initially have no comparative advantages and those industries, which initially enjoy high comparative advantages, while there is a moderate mobility in the pattern of trade for those industries, which initially have weak comparative advantage and those industries, which initially have medium comparative advantages. Finally, there is a low degree of concentration in Vietnam’s exports, and these export pat- terns are more or less moving toward diversification. Measures to further liberalize trade policy, increase human capital formation and facilitate technological transfer are remedies for Vietnam to diversify the country’s export structures and move into human capital and technology intensive exports