VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY LE HA PHUONG ANALYZING FACTORS AFFECTING THE EXPORT EFFICIENCY OF VIETNAM’S TEXTILE AND GARMENT TO EU COUNTRIES MASTER'S THESIS VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY LE HA PHUONG ANALYZING FACTORS AFFECTING THE EXPORT EFFICIENCY OF VIETNAM’S TEXTILE AND GARMENT TO EU COUNTRIES MAJOR PUBLIC POLICY CODE 8340402 01 RESEARCH SUPERVISOR Dr DANG QUANG VINH Hanoi, 2021 ACKNOWLEDGEMENTS Writing a master‟s thesis is not an[.]
INTRODUCTION
Research background
Since the Doi Moi reforms in 1986, Vietnam's foreign policy has significantly evolved from International Economic Integration to Comprehensive Economic Integration, ultimately leading to In-depth International Integration Trade liberalization plays a crucial role in this integration process, highlighted by Vietnam's accession to the WTO in 2007 By December 2020, Vietnam had engaged in 15 Free Trade Agreements (FTAs), with 13 already in effect and two more under negotiation These FTAs involve commitments such as tariff reductions and the elimination of trade barriers, which provide substantial benefits for boosting Vietnam's exports, particularly in sectors with high comparative advantages like textiles and garments.
The textile and garment industry is a crucial component of Vietnam's economy, significantly contributing to its export goods In 2007, exports in this sector totaled approximately USD 8.60 billion, but by 2019, this figure had surged to USD 39.42 billion, marking a fivefold increase This growth positioned Vietnam as the world's fourth largest exporter of textiles and garments, following China, the EU, and Bangladesh, and made it the second highest export sector in the country after electrical machinery and equipment.
In 2018, the workforce in Vietnam's industry reached 1,870,239 employees, representing 12.6% of all registered enterprise workers in the country Between 2014 and 2019, this sector experienced an impressive average annual growth rate of approximately 17% (T Nguyen, 2020).
The European Union (EU) ranks as the second-largest market for textile and garment imports, following the United States Since Vietnam's accession to the World Trade Organization (WTO), the export value of its textile and garment products to the EU, including the UK, has seen significant growth, rising from nearly USD 1.65 billion to approximately USD 4.78 billion.
In 2019, Vietnam's export market share of textile and garment products to the EU increased to 2.4%, up from 2.2% the previous year, highlighting the growing significance of the EU as a key market for Vietnam's textiles and garments following the implementation of the EU-Vietnam Free Trade Agreement (EVFTA).
2 into effect on 1st August 2020 This FTA is expected to bring expansive preferential market access for these goods to the EU
An increase in Vietnam's bilateral exports does not necessarily indicate enhanced export efficiency, which measures the country's performance with trading partners Improving export efficiency is crucial for maximizing Vietnam's international trade opportunities and achieving higher trade values Research on countries like China, India, and Bangladesh reveals that despite rising total export values, these nations have not fully realized their export potential due to factors such as economic distance and specific trade-related challenges, including institutional issues, policy limitations, and inadequate infrastructure Vietnamese scholars, including Doan & Xing (2018) and Trung et al (2018), have reached similar conclusions in their studies.
Problem statement and research purpose
Despite numerous studies on export efficiency in various countries, Vietnam has received limited scholarly attention on this topic, particularly regarding the textile and garment sector Most existing research focuses on overall export efficiency rather than specific products, revealing a generally low export efficiency at an aggregated level (Drysdale et al., 2000; Doan & Xing, 2018) This raises the question of whether the textile and garment sector mirrors this low efficiency or stands out as an exception Additionally, few studies have explored the factors influencing export efficiency Analyzing the export efficiency of Vietnam's textile and garment industry and identifying its determinants could provide valuable insights into the country's export performance This information would enable the government to formulate policies aimed at enhancing export efficiency, particularly in light of the new opportunities presented by the EU-Vietnam Free Trade Agreement (EVFTA).
3 efficiency of Vietnam‟s textile and garment to EU countries, Vietnam will take full advantage of EVFTA
This thesis aims to assess the export efficiency of Vietnam's textile and garment industry by utilizing a model based on recent studies, focusing specifically on exports to EU countries Additionally, it examines the factors influencing export efficiency The research findings lead to several recommendations designed to enhance Vietnam's export performance in this sector.
Research questions
This master thesis aims to answer two questions:
1 What is the export efficiency score of Vietnam‟s textile and garment to EU countries from 2007 to 2019?
2 Which country-specific factors affect the export efficiency of Vietnam‟s textile and garment to EU countries during that period?
Scope of the research
The time scope is from 2007 to 2019 The spatial scope is Vietnam‟s textile and garment to 28 EU countries because the UK was still a member of the EU during this period.
Research methodology
This thesis employs a quantitative methodology utilizing two regression models to analyze export efficiency The first model, a stochastic frontier gravity model, assesses overall export efficiency, while the second model investigates country-specific factors influencing this efficiency Both models are estimated simultaneously through a one-step estimation process Data on export values is sourced from UN Comtrade, while country-specific factors are derived from the Global Competitiveness Report by the World Economic Forum (WEF) Additional data is gathered from various reputable sources, including the World Bank, CEPII, and Brugel.org.
Significance of the research
This thesis makes several important contributions:
This study focuses on the most recent data regarding Vietnam's export efficiency, specifically within the textile and garment sector, targeting EU countries rather than a broad selection of global partners By analyzing disaggregated data, the findings provide a clear picture of the current export efficiency of Vietnam's textile and garment industry to the European market.
This study provides an in-depth analysis of the efficiency of Vietnam's textile and garment exports, detailing the methods of computation and the influencing factors Additionally, by examining these determinants, the paper presents recommendations for adjusting their impacts to enhance export efficiency.
This thesis presents a thorough methodology for assessing the export efficiency score of Vietnam's textile and garment industry in relation to EU countries, while also identifying the influencing factors The study employs the stochastic frontier gravity model with a one-step estimation approach, as developed by Battese & Coelli (1995).
Structure of the research
This thesis is organized as follows:
Chapter 1: Introduction This chapter provides an overview of the research including research background; problem statements; definitions of key terms; research purposes; research questions; scope, method and significance of the research
Chapter 2: Literature review This chapter briefly presents previous academic research related to this topic Chapter 2 contains four sections: Overview of textile and garment industry, and textile and garment industry export in Vietnam; research on trade potential, trade efficiency, and export efficiency at aggregated level; research on trade potential, trade efficiency, and export efficiency at disaggregated level The final part summarizes the research gap
Chapter 3: Methodology This chapter discusses the method and methodology I use Several reasons are provided to explain the selection of stochastic frontier gravity model and its variables This part also introduces this model and distinguishes it from conventional gravity model Data collection and data description is also included in this chapter
Chapter 4: Research findings This chapter is divided into 2 parts First, it shows the impact of country-specific factors such as infrastructure, institution, and policy on export efficiencies of Vietnam‟s textile and garment export to EU countries Second, estimated scores of these efficiencies are also presented The results are compared to results of previous studies in the literature review
Chapter 5: Conclusions This chapter summarizes the main content and findings, provides some policy recommendations, indicates the limitations of this thesis, as well offers some suggestions for further research
THEORETICAL FRAMEWORK AND LITERATURE REVIEW
Definitions
The export potential between two countries is determined by factors such as GDP, GDP per capita, and cultural and historical characteristics, representing the maximum export achievable without trade barriers (Kalirajan, 1999) Export efficiency, or export performance, is measured as the ratio of actual exports to export potential, indicating the extent to which an exporter has realized its potential with its trading partner.
Overview of Vietnam textile and garment sector
2.2.1 Current status of Vietnam textile and garment industry
The textile and garment industry is a vital export sector in Vietnam, demonstrating consistent double-digit growth over the years As of December 31, 2018, there were 1,870,239 employees across 12,031 enterprises in this sector, representing 12.6% of the country's total workforce The industry comprises 7,627 garment manufacturers and 4,404 textile manufacturers, with the latter primarily serving the domestic market due to lower quality While a significant portion of firms in this industry are private, many are small and medium-sized enterprises (SMEs) Notably, foreign direct investment (FDI) firms account for 70% of the largest companies in the sector, alongside state-owned enterprises.
Figure 2.1: Main modes of production of Vietnam's textile and garment industry
Despite the rapid growth of Vietnam's textile and garment industry, it still experiences low added value due to its reliance on basic processing methods for export, primarily CMT (Cut, Make, Trim), which constitutes 65% of production and offers minimal value addition In contrast, more advanced methods like OEM/FOB, ODM, and OBM contribute significantly less at 25%, 9%, and 1%, respectively (ASEAN Securities, 2019) This low added value is attributed to Vietnam's dependence on imported raw materials from China and Korea, alongside an unstable domestic supply Additionally, challenges such as low-skilled labor, weak competitiveness, and poor management among local firms further exacerbate the issue (Hoi, 2012).
2.2.2 Current status of Vietnam textile and garment export to EU countries
In 2019, Vietnam secured the 4th position among the world's largest textile and garment exporting countries, following China, the EU, and Bangladesh The European Union serves as a crucial market for Vietnam's textile and garment industry.
From 2007 to 2019, Vietnam experienced a consistent growth in its textile and garment exports, overcoming challenges posed by the global economy In 2007, the export turnover for this sector was USD 8.60 billion, which significantly increased by 2019.
Vietnam's textile and garment exports to the EU have shown significant growth, rising from USD 1.65 billion in 2007 to USD 1.85 billion in 2008 Although there was a slight decline to USD 1.78 billion in 2009 due to the global economic crisis, exports rebounded to USD 2.10 billion in 2010 and continued to increase, reaching USD 2.79 billion in 2011 In 2012, exports saw a minor decrease to USD 2.72 billion, but the overall trend from 2013 to 2019 indicates a strong performance in the textile and garment sector.
In 2019, the export of Vietnamese textile and garment products to the EU reached USD 4.78 billion, solidifying the EU's position as the second largest market for these goods, following the USA.
The share of the European Union in Vietnam's total textile and garment export turnover has been declining, dropping from over 19% in 2007 to around 12% in 2019.
Figure 2.2: Export turnover of Vietnam's textile and garment, 2007 – 2019 (USD)
Vietnam's textile and garment exports to the EU have experienced more significant fluctuations compared to global trends Despite these instabilities, the growth rate for exports to the EU has generally remained high, with notable exceptions in 2009 and 2012.
In light of the global economic crisis and the European debt crisis, Vietnam's textile and garment exports to the EU experienced significant growth, even surpassing the global growth rate during certain periods Notably, in 2019, Vietnam's exports in this sector to the EU rose by over 5%.
Figure 2.3: Export growth rate of Vietnam's textile and garment, 2007 – 2019 (%)
Vietnam's textile and garment exports to the EU exhibit a distinct market structure, with seven key markets: Germany, the UK, the Netherlands, France, Spain, Belgium, and Italy Notably, Germany stands out as the largest importer, with these seven markets collectively representing 89% of Vietnam's textile and garment export turnover to the EU in 2019 In contrast, the remaining 21 markets contributed only 11% The primary products exported to the EU fall under HS codes 61, 62, and 63, which together account for approximately 95% of the export composition.
Figure 2.4: Structure of Vietnam's textile and garment export to EU (by market, and by
HS code), 2019 (%) Data source: UNComtrade
Research on trade potential, trade efficiency, and export efficiency
In 2006, Batra employed the augmented gravity model using ordinary least squares (OLS) to assess India's trade potential with 145 partners, utilizing cross-sectional data from 2000 His analysis included basic independent variables such as GNP and GNP per capita, along with additional factors like dummy variables representing historical and cultural ties, including borders, common languages, and colonization To address econometric challenges, he implemented instrumental variables (IV) estimations to tackle endogeneity issues For country pairs exhibiting zero trade values, Batra applied three strategies: excluding these data points, estimating a restricted model, and employing alternative estimation techniques.
This research utilized semi-log formulation and Tobit techniques, revealing that Italy, the UK, and France have the highest potential for expanding trade with India While India has largely tapped out its export potential to the Commonwealth of Independent States (CIS) region as a whole, significant opportunities remain for increasing exports to many individual countries within that area.
Abbas and Waheed (2019) employed a gravity model to examine the trade flow between Pakistan and 47 selected trading partners from 1980 to 2013 They utilized the coefficients derived from their analysis to assess Pakistan's trade potential, building on the methodology established by Batra (2006) Additionally, Abbas and Waheed incorporated two dummy variables to enhance their model.
The study analyzed the impact of the South Asian Free Trade Agreement (SAFTA) and bilateral free trade agreements (BFTAs) using three models, ultimately finding that generalized least squares (GLS) estimation was the most effective method The findings indicated that Pakistan has maximized its export potential with various Asian and European trading partners However, by diversifying its export portfolio beyond a limited range of goods, Pakistan could enhance its export opportunities to several EU countries, including the UK, Bulgaria, France, and Greece.
Drysdale et al (2000) analyzed trade efficiency between China and 57 trading partners using a stochastic frontier gravity model (SFGM) that included GDP, population, geographical distance, common language, and resource complementarity as independent variables Their findings revealed that from 1991 to 1995, China's average trade efficiency as an exporter and importer was notably low, at 0.28 and 0.27, respectively Among EU markets, China demonstrated the highest export efficiencies with Ireland, Belgium-Luxembourg, Finland, and the Netherlands, achieving rates of 0.45, 0.43, 0.42, and 0.41, while Cyprus had the lowest efficiency at 0.21 To further investigate the factors influencing trade efficiency, the researchers employed an additional regression model that considered tariffs, economic freedom, and mutual understanding between countries, using a White-heteroscedasticity consistent estimator due to OLS method limitations Interestingly, EU membership negatively impacted China's trade efficiency, prompting the authors to recommend policy measures aimed at reducing economic constraints to enhance trade efficiency.
Kalirajan and Singh (2008) conducted a comparative analysis of the export efficiency between India and China from 2000 to 2003 using two distinct methods Initially, they employed a conventional gravity model utilizing an OLS estimator, which incorporated key factors such as the GDP and population of the importing country, geographical distance, trade openness, area, weighted average tariff, and non-tariff barriers.
A study comparing the export potential of India and China utilized a barrier index and growth competitiveness index, revealing that China's export performance surpassed India's By applying a stochastic frontier gravity model that accounted for both "behind the border" and "beyond the border" factors, researchers found that India realized only 68% of its export potential, in contrast to China's 86% Additionally, while China's export efficiency improved over the study period, India's remained stagnant To enhance its export efficiency, India should adopt best practices from China's policies.
Roperto and Edgardo (2014) conducted a study to estimate and analyze the factors affecting export efficiency in the Philippines, aiming to reduce the country's merchandise trade deficit Utilizing a Stochastic Frontier Gravity Model (SFGM), they examined export data from the Philippines and 69 key trading partners between 2009 and 2012, focusing on three primary independent variables: the GDP and population of the importer, and the geographical distance to trading partners Addressing gaps in previous research, their second linear model explored "beyond the border" constraints, including factors such as freedom from corruption, fiscal freedom, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom of the importer Additionally, they incorporated dummy variables representing mutual understandings between countries, such as APEC, ASEAN, and common language The findings revealed that APEC, ASEAN, common language, freedom from corruption, and labor freedom positively influenced export efficiency, while other indicators showed no significant impact on export inefficiency.
The study indicated that "beyond the border" factors did not significantly impact the variations in the Philippines' export efficiency The authors recommended that future research should focus on "behind the border" factors to better understand the determinants of export efficiency Notably, the Philippines' export efficiency score showed a slight decline over the surveyed period, with the mean value decreasing.
48% to 42% In 2012, the export flow was least effective with the EU, at 43% Among
The Philippines demonstrated the highest export efficiency among EU members with the UK at 93.46% and Denmark at 93.34% Other countries like Sweden (76.88%), the Netherlands (75.79%), Belgium (72.24%), and Finland (70.57%) also exhibited strong export efficiencies In contrast, Croatia (11.79%), Greece (13.79%), and Slovakia (16.20%) reported significantly lower export efficiencies.
Ravishankar & Stack (2014) also used an SFGM to examine the efficiency of trade integration between 17 Western European nations and 10 new members from 1994 to
In 2007, a study utilized maximum likelihood estimation (MLE) to analyze the trade integration between East and West EU countries, incorporating variables such as the GDP of both exporters and importers, the absolute difference in logged GDP per capita, geographical distance, and both time-varying and time-invariant explanatory factors The research introduced two dummy variables to account for the years new members joined the EU Findings indicated that following the dissolution of the Council for Mutual Economic Assistance (CMEA), East-West EU trade integration exhibited significant performance, with former communist nations achieving two-thirds of their trade potential with established EU countries Notably, Bulgaria and Romania, the newest EU members, demonstrated a higher level of trade integration compared to earlier entrants The authors concluded that enhancing infrastructure and reducing transportation costs could further boost exports for the ten new EU members.
Nguyen & Doan (2017) pioneered the use of a stochastic frontier gravity model to analyze the determinants of trade efficiency in Vietnam, focusing on 30 trading partners over an 11-year period from 1995 to 2015 Their research utilized a two-step estimation approach, where the first step incorporated standard independent variables from conventional gravity models, such as GDP, population, weighted distance, relative land area, and dummy variables for landlocked nations and time trends In the second step, the trade efficiency derived from the first model served as the dependent variable to investigate additional influencing factors, including dummy variables for ASEAN membership, weighted tariffs, and economic indicators.
The research revealed that Vietnam's trade efficiency, particularly with the EU and NAFTA, is notably low, with average export and import efficiencies of 21.21% and 19.78% respectively by 2015 Between 2010 and 2015, the highest export efficiencies were recorded with the Netherlands (47.57%), the UK (33.59%), Belgium (44.08%), and France (27.65%), while Greece, Germany, and Finland showed low efficiencies ranging from 2.39% to 7.24% Although AFTA contributed to an increase in trade efficiency, factors such as tariffs and domestic currency devaluation negatively impacted it Therefore, Nguyen and Doan recommend that Vietnam pursue additional regional Free Trade Agreements (FTAs) and remove artificial barriers, including enhancing economic freedom and reducing tariffs, to improve trade efficiency.
Doan & Xing (2018) conducted a two-step estimation of the Stochastic Frontier Gravity Model (SFGM) to assess Vietnam's export efficiency with 28 trading partners from 1995 to 2013, focusing on the impact of Free Trade Agreements (FTAs) and rules of origin Their findings revealed a notable increase in export efficiency during this period, rising from 19.7% to 37.9%, yet indicating significant untapped potential, particularly in the EU market where Vietnam achieved only about one-third of its export potential The highest export efficiencies were recorded with Belgium, the Netherlands, Germany, the UK, and France, while Greece had the lowest at 10.91% Following the efficiency calculations, the study employed a regression model to identify determinants such as the restrictiveness of rules of origin, trade agreements, trade freedom index, tariffs, non-tariff measures, and foreign direct investment (FDI) from importers The authors recommended that Vietnam negotiate to lower the restrictiveness of rules of origin, reduce tariff and non-tariff barriers, and attract more FDI to enhance export efficiency.
Trung et al (2018) utilized the Stochastic Frontier Gravity Model (SFGM) to assess the impact of the ASEAN–India Free Trade Agreement (AIFTA) and the ASEAN–China Free Trade Agreement (ACFTA) on Vietnam's bilateral trade and trade efficiency, analyzing data from 2000 to 2015 Their model incorporated variables such as Vietnam's GDP, partner countries' total expenditure, and geographical factors, along with macroeconomic indicators like FDI per capita and the real effective exchange rate The findings indicated that Vietnam's trade efficiency was relatively low, with export efficiency being 15% higher than import efficiency Notably, Vietnam's accession to the WTO led to a decline in trade efficiency, with export efficiency decreasing from 47.4% to 46.3% and import efficiency from 33.8% to 32.6% Additionally, while most ASEAN FTAs negatively impacted Vietnam's trade efficiency, AIFTA positively influenced bilateral trade flows, whereas ACFTA significantly affected exports negatively without impacting imports.
Research on trade potential, trade efficiency, and export efficiency by sector
Ahsan & Chu (2014) utilized a stochastic frontier gravity model to assess the potential and limitations of Bangladesh's environmental goods and services (EGs) exports, analyzing cross-sectional data from 41 major importers across six regions from 2001 to 2007 Key factors included GDP, trading partner population, geographical distance, exchange rates, import tariffs, and FTAs The study revealed significant untapped export potential for Bangladesh, particularly in the EU market, where the UK had the highest export performance at 77.96% in 2001, though it fell sharply to 28.03% by 2007 In that year, the Netherlands, Spain, and Greece emerged as the top three countries in export efficiency, while Denmark and Portugal showed the lowest efficiencies The authors attributed the low export efficiency to "behind the border" factors but could not pinpoint specific constraints due to data limitations.
“implicit beyond the border” constraints helped Bangladesh increase its export of EGs
Atif et al (2017) assessed the export potential of Pakistan's agricultural products using a stochastic frontier gravity model, analyzing data from 1995 to 2014 with 63 trading partners Their model incorporated key factors such as the GDP of both exporter and importer, geographical distance, and various time-invariant and time-varying variables, including average tariffs and bilateral exchange rates The study further segmented the analysis period into four distinct intervals to enhance the evaluation.
Between 1995 and 2014, Pakistan's average export efficiency with various trading partners showed a declining trend, indicating that the country has not achieved optimal export performance Notably, during the period from 1995 to 1999, the Netherlands recorded the highest export efficiency for Pakistan's agricultural goods at 16.37%, which subsequently fell to 14.27%, 12.31%, and 10.50% in the following periods Similar declines were observed in export efficiency with other EU countries, including Belgium, Denmark, France, Germany, Italy, Spain, and the UK, highlighting Pakistan's significant export potential within the EU market.
Zaman and Kalirajan (2019) conducted a study on the export performance of primary and renewable energies across 20 countries in South, Southeast, and East Asia from 2006 onwards Their research focused on identifying strategies to enhance this performance through increased intraregional trade.
In 2016, researchers utilized a stochastic frontier gravity model to analyze trade dynamics, incorporating key factors such as the GDP of both importer and exporter, geographical distance, import tariffs, the cross exchange rate between the two nations, and a dummy variable for regional trade agreements (RTAs) as explanatory variables.
To assess factors influencing export efficiency, the authors developed an export efficiency model incorporating variables such as institutional quality, infrastructure quality, market efficiency, and technological readiness for both exporters and importers The findings revealed that the stochastic frontier gravity model was unsuitable for countries like Cambodia and Laos, leading to their exclusion from the analysis The average export efficiency for primary energy and renewable energy products in the region was found to be 56.5% and 63.1%, respectively Additionally, the study concluded that institutional quality, infrastructure quality, market efficiency, and technological readiness positively affected export efficiencies across nearly all examined countries.
In a study by Nguyen (2020), a stochastic frontier gravity model was employed to analyze the factors influencing Vietnam's rice and coffee exports, utilizing data from 2000 to 2018 Key independent variables included the GDP of both Vietnam and its trading partners, as well as population metrics, providing insights into the export performance of these vital agricultural products.
Vietnam's export performance for rice and coffee has been relatively low across most trading partners, with the exception of China, Hong Kong, and Algeria Despite the EU being a primary market for these commodities, there remains a significant disparity between potential and actual exports, with average efficiencies of only 0.2 for rice and 0.25 for coffee Notably, Vietnam's coffee exports to Germany, Spain, Italy, and Belgium showed higher efficiencies, while exports to the Netherlands were considerably lower at 0.13 The research highlights that "behind-the-border" constraints hinder Vietnam from achieving optimal export levels, although specific limitations could not be identified due to data shortages.
Nguyen & Wu (2020) analyzed the export efficiency of Vietnam's 11 major exporting products, including key sectors such as agricultural goods, textiles, leather, footwear, and electrical equipment While there was a general upward trend in export efficiency for these products, it remained lower than the overall aggregated export efficiency Specifically, the export efficiency for textiles, leather, and footwear declined from 43.03% to 42.89% between 1996 and 2010, before rising to 44.65% in 2014 The authors emphasized that enhancing governance, participating in more Regional Trade Agreements (RTAs), and negotiating tariff reductions could significantly boost Vietnam's export efficiencies and the actual export value of its major products.
Research gap
Numerous researchers have explored trade potential, trade efficiency, and export efficiency at both aggregated and disaggregated levels, utilizing various methods such as the conventional gravity model and the stochastic frontier gravity model However, there is a scarcity of studies specifically focused on Vietnam's export efficiency, with existing publications primarily addressing export dynamics.
Research on Vietnam's export efficiency presents varying conclusions While some studies highlight a relatively low export efficiency for the country (Nguyen & Doan, 2017; Doan & Xing, 2018; Nguyen, 2020), others suggest that Vietnam demonstrates high export efficiency, particularly with several major trading partners (Nguyen & Wu, 2020) Notably, only two articles focus specifically on the export efficiency of Vietnamese rice and coffee (Nguyen, 2020) and the 11 major exporting products of Vietnam (Nguyen & Wu, 2020).
Recent studies have identified key determinants of export efficiency, as summarized in Table 2.1 However, many current research efforts utilize a two-step approach, which can result in inaccurate estimations To address this issue, this research employs a one-step estimation of the stochastic frontier gravity model to assess the export efficiency of Vietnam's garment and textile sector to EU countries, while also identifying the factors influencing this efficiency.
Table 2.1: Summary of research on identifying determinants of export efficiency
Restrictiveness of rule of origin Doan & Xing (2018) -
Tariff by importer Drysdale et al (2000), Nguyen &
Doan (2017), Doan & Xing (2018), Nguyen & Wu (2020)
Non-tariff barrier by importer Doan & Xing (2018) - / +
FDI from importer Doan & Xing (2018) +
FTA Drysdale et al (2000), Roperto &
1 Details on the disadvantages of two-step approach can be seen in section 3.1 Stochastic frontier gravity model
Trade freedom index Roperto & Edgardo (2014), Doan
Economic freedom of exporter Drysdale et al (2000), Nguyen &
Exchange rate of exporter Nguyen & Doan (2017) -
Cost of importing not significant
Business freedom index of importer not significant
Investment freedom index of importer not significant
Freedom of corruption of importer
Fiscal freedom index of importer not significant
Labor freedom index of importer
Monetary freedom index of importer not significant
Financial freedom index of importer not significant
Quality of institution of both exporter and importer
Quality of infrastructure of both exporter and importer
Level of good market efficiency of both exporter and importer
State of technological readiness of both exporter and importer
World governance indicator of both exporter and importer
METHODOLOGY
Stochastic frontier gravity model
The stochastic gravity model can be defined as:
X ijt = f(Y ijt ; β)exp(vijt – uijt)
X ijt : Actual export of country i to country j at time t
f(Y ijt ; β): Function of factors determining the export potential Y ijt
v ijt : Double-sided or statistical error term, which is assumed to follow a normal distribution with 𝑁 (0, 𝜎 v 2 )
u ijt : Single-sided error term or export inefficiency, capturing man-made constraints or country-specific factors v ijt and u ijt are independent
Battese & Coelli (1995) propose that the error term \( u_{ijt} \) is independently distributed, adhering to a non-negative truncated normal distribution characterized by the parameters \( (z_{ijt}\delta, \sigma_u^2) \) This term \( u_{ijt} \) is influenced by a range of explanatory variables The model designed to identify the factors contributing to export inefficiency is expressed as \( u_{ijt} = z_{ijt}\delta + w_{ijt} \).
z ijt : Explanatory variables, associated with export inefficiency of country i with country j at time t
w ijt : Error term, assumed to follow truncated normal distribution with 𝑁 (0, 𝜎 w 2 ) such that w ijt ≥ - z ijt δ
The second regression in the two-step approach for analyzing factors affecting export efficiency challenges the assumption of independent identical distribution (Battese & Coelli, 1995) Additionally, numerous scholars acknowledge that the two-step procedure may yield biased results due to potential misspecification in the first step (Wang & Schmidt, 2002) Consequently, this thesis adopts a one-step estimation method developed by Battese & Coelli (1995).
Then, the export efficiency is calculated as ratio of actual to potential export:
Kalirajan (2008) highlights several advantages of the stochastic frontier model in trade analysis Firstly, the model effectively eliminates the bias associated with "economic distance" as this is captured within the error term, u Secondly, by separating it from the statistical error term, vijt, the model allows for a more accurate calculation of export efficiency and the factors influencing it Additionally, the stochastic frontier gravity model offers trade potential estimates that align closely with free trade scenarios, representing the upper limits of data from economies with minimal trade restrictions Lastly, this approach is grounded in robust theoretical implications for trade policy.
The Maximum Likelihood Estimation (MLE) method is utilized for the simultaneous estimation of coefficients in models 3.1 and 3.2 To evaluate the impact of man-made resistance on export within the context of the Suitability of Stochastic Frontier Growth Model (SFGM), the parameter γ is introduced, which ranges between 0 and 1 Accepting the null hypothesis that γ equals 0 indicates that 𝜎u² is also 0, suggesting that the term uijt can be excluded as it does not exert any influence.
The model discussed in equation (3.1) evolves into the traditional gravity model when the variable \( u_{ijt} \) is incorporated A higher value of \( \gamma \) indicates a stronger influence of country-specific factors, supporting the effectiveness of the stochastic frontier approach.
Expansion of model
Kalirajan & Singh (2008) classified factors influencing actual export flow into 3 main groups: Natural factors, export country factors (“behind the border” factors), import country factors (“beyond the border” factors)
Natural factors influencing demand and supply include variables such as GDP, GDP per capita, geographical distance, and the cultural and historical connections between nations These elements serve as fundamental determinants in various gravity models.
"Behind the border" factors refer to country-specific elements controlled by exporting nations, including institutional, political, and infrastructural conditions These factors play a crucial role in influencing trade facilitation and can significantly affect the efficiency of international trade.
“Beyond the border” factors are country-specific factors of importing countries
"Beyond the border" encompasses both explicit and implicit factors that affect international trade Explicit factors include easily identifiable tariff and non-tariff barriers imposed by the importing country, which exporting nations can readily observe and quantify In contrast, implicit factors stem from the institutional, political, and infrastructural characteristics of the importing country, making them challenging for exporting nations to detect and measure, as they remain beyond their control.
This study employs a stochastic frontier gravity model, as classified by Kalirajan & Singh (2008), to assess the export efficiency of Vietnam's textile and garment sector to EU countries The model is expressed as lnX jt = β 0 + β 1 lnY jt + β 2 lny jt + β 3 lnDIS j + β 4 COMMU j + β 5 LANDLK j + (v jt – u jt ), where the variables represent various economic factors influencing exports.
X jt : Actual export value of textile and garment from Vietnam to country j at time t
Y jt : GDP of country j at time t
y jt : GDP per capita of country j at time t
DIS j : Geographical distance between Vietnam and country j
COMMU j : Dummy variable which takes a value 1 if both countries are/were communist country and 0 otherwise
LANDLK j : Dummy variable which takes a value 1 if the importer is a landlocked country and 0 otherwise
v jt : Double-sided error-term which captures the effect of inadvertently omitted and unobservable variables
u jt : Single-sided error term which indicates export inefficiency
Independent variables frequently utilized in gravity models include GDP and GDP per capita, which indicate economic size and income level, respectively The geographical distance between Vietnam and its trading partners, along with a dummy variable for landlocked countries, signifies transportation costs Additionally, cultural and historical ties serve to lower transaction costs associated with cultural differences.
This thesis explores the factors influencing export efficiency, highlighting the differing views among researchers on the interpretation of the error term u jt Some economists argue that u jt is influenced solely by "behind the border" factors, as noted by Kalirajan & Singh (2008) and D D Nguyen (2020), while others contend that it is shaped by both "behind the border" and additional elements.
The concept of "beyond the border" significantly impacts the non-negative error term in trade models, as highlighted by Armstrong (2015) and Nguyen & Wu (2020) This thesis posits that maximum export efficiency can only be achieved when both exporters and importers eliminate trade resistance Additionally, the policies of one trading partner can influence the other; for instance, a country may receive financial and non-financial support from a partner with superior infrastructure, thereby enhancing its own infrastructure quality Consequently, it is essential to incorporate "across the border" factors that reflect country-specific determinants in both exporters and importers to effectively model export efficiency However, the extent of influence a country has on others varies significantly.
It is widely believed that economies with higher GDP possess greater influence over others Consequently, the "across the border" factors are determined by the weighted average of "behind the border" and "beyond the border" elements, where the weight reflects each country's share of the combined GDP of both nations.
Armstrong (2007) identified key "across the border" factors that influence trade, such as openness, governance indicators, economic freedom, and competitiveness indices, which indirectly affect export efficiency by shaping the trade environment and management processes (Baccini et al., 2017; Galle et al., 2017; Grossman et al., 2017) These factors, termed trade facilitation factors, can either promote or hinder trade depending on their quality Wilson et al (2003) provided an early framework for measuring trade facilitation, outlining four indicators: port efficiency, regulatory environment, customs environment, and e-commerce These indicators correspond to infrastructure quality, institutional strength, market efficiency, and technological readiness as highlighted in the Global Competitiveness Report Infrastructure quality assesses the effectiveness of transportation modes, while institutional strength reflects policy transparency Market efficiency gauges competition and trade openness, and technological readiness pertains to the digitalization of trade processes Additionally, the macroeconomic conditions of Vietnam and its trading partners, including the real effective exchange rate and trade policy variables like tariffs and non-tariff barriers, significantly impact trade activities However, since these trade policy factors are uniform among EU members and remain constant during the study period—except for Croatia's EU accession in 2014—they are not included in this model.
To analyze the country-specific factors affecting the export efficiency of Vietnam's textile and garment industry to EU nations, the following equation is utilized: u jt = δ 0 + δ 1 INSTW jt + δ 2 INFRW jt + δ 3 GMKEW jt + δ 4 TECHW jt + δ 5 ratio t + w jt (3.5) This equation incorporates various indicators, such as institutional quality, infrastructure, market knowledge, technology, and other relevant ratios, to provide a comprehensive assessment of export performance.
INSTW jt : Weighted average of the strength of institution in Vietnam and country j at time t
INFRW jt : Weighted average of the quality of infrastructure in Vietnam and country j at time t
GMKEW jt : Weighted average of the level of the good market efficiency in Vietnam and country j at time t
TECHW jt : Weighted average of the state of technological adoption and readiness in Vietnam and country j at time t
ratio t : Ratio of the real effective exchange rate of country j at time t to the real effective exchange rate of Vietnam at time t
w jt : Normal statistical error term
Data description
Export value: All export data from Vietnam to trading partners are extracted from UN
The Comtrade database, maintained by the United Nations Statistics Division (UNSD), serves as a vital resource for trade data analysis This thesis focuses on 14 HS codes at the 2-digit level, specifically from HS 50 to HS 63, encompassing the textile and garment sectors—where HS 50 to HS 60 pertains to textiles and HS 61 to HS 63 relates to garments Detailed descriptions of each HS code can be found in the Appendix The study analyzes export data from 28 EU countries spanning the years 2007 to 2019, with a focus on measuring bilateral export values.
US Dollars Nominal export value from UN Comtrade is converted to real value, using
US GDP deflator given by World Development Indicators of the World Bank
GDP and GDP per capita: Real GDP and real GDP per capita in constant 2010 US dollars by countries are collected from World Development Indicators of the World Bank
Geographical distance, measured in kilometers, is derived from data provided by the Centre d'Etudes Prospectives et d'Informations Internationales (CEPII) This distance is calculated using the latitudes and longitudes of the capital cities of Vietnam and its trading partners.
2 HS code: Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) is an international nomenclature for the classification of products
30 distances based on the great circle formula which means that this distance is the minimum distance along the surface of the earth
Cultural and historical factors: Communist, and landlocked country dummy variables are taken from the EU‟s website and CEPII
Trade facilitation relies on data from the Global Competitiveness Report, published annually by the World Economic Forum (WEF), covering the period from 2007 to 2019 This comprehensive data source assesses institutional strengths, infrastructure quality, goods market efficiency, and technological readiness, with higher scores indicating superior performance To ensure comparability between the differing scales used for the years 2007-2017 and 2018-2019, all values were normalized to a consistent scale using a specific normalization method.
The normalized value of the trade facilitation index (x') is calculated using the actual value (x) along with the minimum (x min) and maximum (x max) values of the index, resulting in scores that range from 0 to 1 Each indicator's value is determined as either a simple or weighted average of all sub-indicators, most of which are derived from the Executive Opinion Survey conducted at the national level by WEF partners This survey is centralized and edited by WEF and takes place in the first quarter of the year, ensuring that the final score reflects a weighted average of the most recent and previous years.
The real effective exchange rate data for Vietnam and 28 EU members from 2007 to 2019 can be comprehensively sourced from Bruegel.org This dataset includes the CPI-based real effective exchange rate for Vietnam in relation to 171 trading partners during the same period Table 3.1 below provides a detailed description of the data utilized in this thesis.
Variable Obs Mean Std Dev Min Max lnX 364 16.50751 2.822219 0 20.54763 lnYi 364 26.10211 1.56559 22.84437 29.00331 lnyi 364 10.22928 0.632687 8.776132 11.62597 lnDIS 364 9.033411 0.09189 8.873682 9.263786
INSTW 364 0.5567502 0.107273 0.3964256 0.7866918 INFRW 364 0.6278813 0.151425 0.278434 0.9240967 GMKEW 364 0.5840087 0.053783 0.4933925 0.7151791 TECHW 364 0.6021192 0.127198 0.3743571 0.8664929 ratio 364 0.7813768 0.128665 0.5303222 1.024995
Source: Author‟s calculation based on data collection
The model comprises 364 observations, with independent variables such as export, GDP, GDP per capita, distance, and real effective exchange rate transformed into logarithmic values While the coverage of these independent variables is comprehensive, there are three instances of zero observations for the dependent variable, which may indicate either unreported data or zero exports Following the approach of Pham et al (2014), this study treats all missing values as zero trade To address the issue of undefined logarithms for zero exports, these values are replaced with 1 when calculating the natural logarithm, ensuring the retention of the maximum number of observations.
RESEARCH FINDINGS
Regression results
The Global Competitiveness Report reveals a significant positive correlation among four trade facilitation indicators, as indicated in Table 4.1 of model 3.5 To mitigate multicollinearity issues, each variable will be regressed independently in four distinct models.
Table 4.1: Correlation between four trade facilitation indicators
By using STATA application version 15.1, the estimation results of one-step regression for Vietnam‟s textile and garment export to EU countries (2007–2019) is shown in the 4.2 table
Table 4.2: One-step estimation for Vietnam‟s textile and garment export to EU countries (2007–2019)
VARIABLES Model 1 Model 2 Model 3 Model 4
Note: Robust standard errors in parentheses
The analysis presented in Table 4.2 reveals that the parameter γ for all four models is high, indicating that the stochastic frontier gravity model effectively explains Vietnam's textile and garment exports to the EU The findings demonstrate a significant positive correlation between import demand in EU countries, as indicated by GDP and GDP per capita, and Vietnam's exports Additionally, the historical ties between Vietnam and former communist nations in the EU further enhance export opportunities However, while geographical distance impacts transportation costs and risks, which can hinder export activities, model 3 shows an insignificant effect of lnDIS, suggesting that distance may still positively influence export flow Furthermore, the landlocked status of certain countries does not significantly affect their exports to the EU.
Impact of institution on export efficiency of Vietnam‟s textile and garment to
Table 4.2 indicates that institutions have a negative impact on the export inefficiency of Vietnam's textile and garment sector to EU countries, with statistical significance at the 10 percent level This suggests a positive correlation between strong institutions and export efficiency Improved institutions enhance export efficiency by promoting transparency in policymaking, ensuring good governance, and minimizing trading uncertainties (Schwab, 2017).
Impact of infrastructure on export efficiency of Vietnam‟s textile and garment
Vietnam's textile and garment exports to EU countries are adversely affected by inadequate infrastructure, as highlighted in Table 4.2 A robust infrastructure system, characterized by high-quality roads, railways, seaports, and airports, significantly enhances export efficiency Improved infrastructure facilitates smoother domestic and international transportation, minimizing risks and reducing delivery times for goods.
Impact of goods market efficiency on export efficiency of Vietnam‟s textile and
The efficiency of the goods market significantly influences the export performance of Vietnam's textile and garment industry to EU countries An efficient goods market enhances export efficiency by fostering healthy market competition and ensuring fair treatment of imported goods Additionally, a high level of trade openness associated with an efficient market facilitates the movement of products in and out of the country, further improving export efficiency (Schwab, 2017).
Impact of technology readiness on export efficiency of Vietnam‟s textile and
The infrastructure in Vietnam has a notable negative impact on the export efficiency of its textile and garment sector to EU countries Improved infrastructure, including high-quality roads, railways, seaports, and airports, is crucial for enhancing export efficiency Such developments facilitate smoother domestic and international transportation of goods, minimizing delivery risks and reducing transit times.
4.4 Impact of goods market efficiency on export efficiency of Vietnam’s textile and garment to EU countries
The efficiency of the goods market significantly influences the export inefficiency of Vietnam's textile and garment industry to EU countries An efficient goods market enhances export efficiency by fostering healthy market competition and ensuring fair treatment of imported goods Additionally, a high level of trade openness associated with an efficient goods market facilitates easier entry and exit of products, further improving export efficiency (Schwab, 2017).
4.5 Impact of technology readiness on export efficiency of Vietnam’s textile and garment to EU countries
The adoption of advanced information and communication technologies (ICTs) plays a crucial role in influencing the export efficiency of Vietnam's textile and garment industry to EU countries, with a notably negative and significant impact The integration of these technologies enhances the speed of information exchange between importers and exporters, ultimately affecting trade activities.
36 exporters, minimize transaction costs (Schwab, 2017) As a result, export efficiency will be enhanced.
Export efficiency of Vietnam‟s textile and garment to EU countries
The inefficiency term derived from one-step estimation will be utilized to assess the export efficiency of Vietnam's textile and garment sector for each EU partner annually, as outlined in equation (3.3) The findings are presented in tables A2, A3, A4, and A5, with export efficiency scores ranging from 0 to 1, where a score of 1 indicates the full export potential has been realized A higher export efficiency score signifies improved export performance, while a lower score suggests reduced export potential, indicating limited future growth opportunities This study categorizes export efficiency levels into five distinct groups, as detailed in table 4.3.
Table 4.3: Level of Export efficiency
Export efficiency score Efficiency level
0 < XE < 0.3 Low efficiency 0.3 ≤ XE < 0.6 Average efficiency 0.6 ≤ XE < 0.1 High efficiency
Between 2007 and 2019, Vietnam's textile and garment export efficiency to EU countries averaged between 0.4754 and 0.4919, indicating an average performance level This suggests that Vietnam's textile and garment exports are operating at nearly 50% of their maximum potential, highlighting significant opportunities for growth in actual exports.
Recent studies indicate a divergence in the export efficiency of Vietnam's textile and garment sector to the EU While Nguyen & Doan (2017) reported a low mean export efficiency of approximately 0.2121 in 2015, and Doan & Xing (2018) noted that Vietnam achieved only about one-third of its export potential to the EU from 1995 to 2013, Nguyen (2020) corroborated these findings, revealing that export efficiencies for Vietnam's rice and coffee were around 0.2 and 0.25, respectively The discrepancies in results may stem from differences in data selection and methodology, as previous studies utilized two-step estimation, whereas my analysis employed a one-step estimation approach My findings align more closely with Nguyen & Wu (2020), who estimated Vietnam's aggregated export efficiency at roughly 0.48 from 1996 to 2014, with the textile, leather, and footwear sectors showing an efficiency of about 0.414.
This thesis aligns with the findings of Trung et al (2018), which reported that Vietnam's mean trade efficiency was 0.463 from 2007 to 2015 Notably, this figure is lower than the mean trade efficiency recorded for the year 2000.
2007 In other words, Vietnam‟s trade efficiency has reduced after joining WTO Nguyen (2020) confirmed this conclusion in his research
The analysis presented in tables A2, A3, A4, and A5 of this thesis indicates a notable upward trend in the export efficiencies of Vietnam's textile and garment sector to EU countries, aligning with the findings of Nguyen & Wu (2020) The mean export efficiencies, represented by Mean1, reveal that the lowest performance occurred in 2007, placing Vietnam in the lower average efficiency group However, over the span of twenty years, these efficiencies have significantly improved, allowing Vietnam's textile and garment exports to rise to the upper average efficiency group.
Vietnam's textile and garment export efficiencies to EU countries vary significantly, with high efficiency reported for 9 countries, average efficiency for 13 countries, and low efficiency for 6 countries The detailed breakdown of these countries according to their export efficiency groups is provided below.
- Low efficiency trading partners: Cyprus, Ireland, Lithuania, Malta, Portugal, Slovenia
- Average efficiency trading partners: Austria, Croatia, Czechia, Estonia, Finland, France, Greece, Hungary, Italy, Latvia, Poland, Romania, Slovakia
- High efficiency trading partners: Belgium, Bulgaria, Denmark, Germany, Luxembourg, the Netherlands, Spain Sweden, the UK
Belgium leads in export efficiencies, closely followed by the Netherlands and Germany, with bilateral export efficiencies in textile and garment trade with Vietnam exceeding 0.7267 In contrast, Portugal shows the lowest efficiency at 0.1247, with Lithuania and Malta also falling below 0.2 These findings align with previous studies highlighted in the literature review.
CONCLUSION
Research summary
This thesis aims to calculate the export efficiency of Vietnam's textile and garment to
28 EU countries and identify its determinants over the 2007 – 2019 period I apply one-step estimation of the stochastic frontier gravity model to achieve these research purposes
This thesis examines the determinants of export efficiency, focusing on four key trade facilitation indicators from the Global Competitiveness Report: institutional strength, infrastructure quality, market efficiency, and technological readiness These indicators exhibit a strong positive correlation and are analyzed individually in the regression model The findings reveal that each indicator significantly enhances the export efficiency of Vietnam's textile and garment sector to EU countries.
Since I use four separate models to estimate, four mean export efficiencies are computed from the SFGMs Overall, the mean export efficiency of Vietnam's textile and garment to EU countries is in the average efficiency group Mean export efficiencies for models with institution, infrastructure, goods market efficiency, and technological adoption and readiness are 0.4794, 0.4919, 0.4754, and 0.4854 respectively This means that if export efficiency is improved, there will be great room for Vietnam to increase actual export of textile and garment to EU countries in the future In addition, in spite of slight fluctuation, the 2007 – 2019 period sees an overall upward trend in score of export efficiency of Vietnam's textile and garment to EU countries Belgium, the Netherlands, and Germany are countries with the highest export efficiencies with Vietnam, achieving at high efficiency level Meanwhile, the lowest export efficiencies are recorded in Portugal, Lithuania, and Malta with the values in the low efficiency group.
Policy implication
Only a half of Vietnam‟s export potential to EU countries has been realized Therefore, Vietnam should continue exporting textile and garment to high export efficiency
40 trading partners while finding more opportunities to promote actual export of these products to importers with lower export efficiencies
The study reveals that Vietnam's textile and garment export efficiency to EU countries is significantly enhanced by strong institutions, quality infrastructure, effective market efficiency, and advanced technological readiness Improving these trade facilitation indicators is crucial for boosting export efficiency Collaboration between Vietnam and its trading partners is essential to enhance the trade facilitation environment Additionally, Vietnam can learn from EU members that already maintain a robust trade facilitation framework.
Limitation of the study
There are a few limitations of this thesis that can be improved in further research:
This thesis focuses on Vietnam's textile and garment export efficiency to EU countries, explicitly excluding the examination of tariffs, non-tariff barriers, and trade agreements, as these factors have remained relatively constant throughout the surveyed periods.
The research primarily focuses on the EU market, overlooking the influence of non-EU countries Vietnam's textile and garment exports extend beyond EU members to various global markets, suggesting that the characteristics of these non-EU nations could significantly affect Vietnam's overall export performance and efficiency in the EU.
The thesis examines "across-the-border" factors that reflect the traits of both Vietnam and its trading partners A notable limitation of this approach is the challenge in isolating the effects of Vietnamese policy-related factors on the export efficiency of its textile and garment industry to EU countries Nonetheless, enhancing trade facilitation indicators could significantly boost Vietnam's export performance.
"behind-the-border" constraints, “across-the-border” factors also will be affected As a result, the export efficiency of Vietnam's textile and garment to EU countries will be enhanced
Future research should extend the analysis period to better understand the impacts of tariffs, non-tariff barriers, and trade agreements, particularly following the implementation of the EVFTA in 2020 This agreement provides various tariff preferences and imposes stricter rules of origin for Vietnam It is essential for subsequent studies to examine how the EVFTA affects the export efficiency of Vietnam's textile and garment industry to EU countries.
This study utilizes trade facilitation indicators from the World Economic Forum's Global Competitiveness Reports to highlight country-specific factors These factors can also be represented by various variables, including the World Governance Indicators and components of the Economic Freedom Index Future research may explore additional trade facilitation indicators from alternative sources such as the Global Enabling Trade Report by WEF, the World Bank's Trading Across Borders report, or the UN Global Survey on Trade Facilitation and Paperless Trade Implementation.
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Table A1: Description of HS code
51 Wool, fine or coarse animal hair, horsehair yarn and woven fabric
53 Other vegetable textile fibres, paper yarn and woven fabrics of paper yarn
56 Wadding, felt and nonwovens, special yarns, twine, cordage, ropes and cables and articles thereof
57 Carpets and other textile floor coverings
58 Special woven fabrics, tufted textile fabrics, lace, tapes- tries, trimmings, embroidery
59 Impregnated, coated, covered or laminated textile fabrics, textile articles of a kind suitable for industrial use
61 Articles of apparel and clothing accessories, knitted or crocheted
62 Articles of apparel and clothing accessories, not knitted or crocheted
63 Other made up textile articles, sets, worn clothing and worn textile articles, rags (Source: General Department of Vietnam Customs
Table A2: Export efficiency of Vietnam textile and garment to EU countries, 2007 – 2019 (model with institution)
Table A3: Export efficiency of Vietnam textile and garment to EU countries, 2007 – 2019 (model with infrastructure)
Table A4: Export efficiency of Vietnam textile and garment to EU countries, 2007 – 2019 (model with goods market efficiency)
Table A5: Export efficiency of Vietnam textile and garment to EU countries, 2007 – 2019 (model with technology adoption)