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.