Luận án tiến sĩ: Động lực xuất khẩu Việt Nam - Tiếp cận TiVA của Shashi Kant Prasad Chaudhary

VIETNAM NATIONAL UNIVERSITY, HANOI UNIVERSITY OF ECONOMICS AND BUSINESS SHASHI KANT PRASAD CHAUDHARY EXPORT DYNAMICS OF VIETNAM: TRADE IN VALUE ADDED (TIVA) APPROACH DISSERTATION IN INTERNATIONAL ECONOMICS Hanoi – 2020 TIEU LUAN MOI download : skknchat@gmail.com VIETNAM NATIONAL UNIVERSITY, HANOI UNIVERSITY OF ECONOMICS AND BUSINESS SHASHI KANT PRASAD CHAUDHARY EXPORT DYNAMICS OF VIETNAM: TRADE IN VALUE ADDED (TIVA) APPROACH (ĐỘNG LỰC CHO XUẤT KHẨU CỦA VIỆT NAM: TIẾP CẬN TỪ PHƯƠNG PHÁP GIÁ TRỊ GIA TĂNG THƯƠNG MẠI) Major: International Economics (Chuyên ngành: Kinh tế Quốc tế) Code: 9310106.01 DISSERTATION IN INTERNATIONAL ECONOMICS (LUẬN ÁN TIẾN SĨ KINH TẾ QUỐC TẾ) SUPERVISOR: Associate Professor Dr Nguyen Viet Khoi Hanoi - 2020 TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENT I would like to express my sincere gratitude to my supervisor Associate Professor Dr Nguyen Viet Khoi who has been a constant source of inspiration and encouragement. Without his invaluable suggestions and encouragement, my research work would not have taken this form. I would also like to express my sincere thanks and appreciation to Dr Nguyen Cam Nhung (UEB, VNU), Dr Nguyen Thi Kim Anh (UEB, VNU), Dr Nguyen Tien Minh (UEB, VNU), Dr Nagendra Lal Srivastava (TU, Nepal), Dr Dilli Ram Pokhrel (Nepal Rastra Bank) and Dr Jun Alejo Bathan (British University Vietnam) for their invaluable comments and suggestions to improve the quality of dissertation. I would also like to thank anonymous referees for their valuable comments in terms of enhancing the quality of this dissertation.

I also acknowledge the motivation and support that I received from my lecturers while undertaking the PhD modules, in specific to Dr Le Quoc Hoi, Dr Nguyen Thi Kim Anh, Dr Nguyen Xuan Thien, Dr Nguyen Thi Kim Chi, and Dr Ha Van Hoi. Apart from them, I also say a big thank to Mr Tuan, Mr Quang, Mr Dat and all other support staffs at the office of Academic and Training Department, UEB. A special thank goes to Chris Jeffery, the Dean of British University Vietnam who constantly supported me in providing flexible working schedule and constant encouragement. Last but not the least, my family deserves a special credit for bringing me so far in this utmost academic journey.

Words cannot compensate the sacrifices they have made on my behalf. Thank you very much all. TIEU LUAN MOI download : skknchat@gmail.com DECLARATION I declare that this dissertation, which I have submitted to the University of Economics and Business (UEB), Vietnam National University, Hanoi for assessment in consideration for the award of the degree of Doctor of Philosophy (PhD) has been composed solely by myself. Except where states otherwise by reference or acknowledgment, the work presented is entirely my own.

I have not submitted before, in whole or in part of this work to UEB or any other institution for any professional qualification. I have taken due care to ensure that the work is original and does not breach any copyright law. Signed: _________________________ Shashi Kant Prasad Chaudhary Student Number: MSHV 15058009 Date: 10 March 2020 TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS LIST OF ACRONYMS USED. i LIST OF TABLES.

iii LIST OF FIGURES. vi EXECUTIVE SUMMARY. vii CHAPTER 1: INTRODUCTION. Statement of the problem.

Objectives of the study. Significances of the study. Delimitations of the study. Organisation of the dissertation .7 CHAPTER 2: LITERATURE REVIEW.

Importance of „Trade in Value Added (TiVA)‟ approach. A better understanding of bilateral trade imbalances. An effective measure of the efficacy of trade barriers and trade measures. A better way to analyse job contribution of trade.

A better measure of trade competitiveness. Measuring backward and forward linkages of an economy. Fair assessment of the environmental impact of trade. Earlier Studies in context of Vietnam .20 CHAPTER 3: RESEARCH METHODOLOGY.

Sources of data and study period. Estimation of „Trade in Value Added‟. Construction of an inter-country input output (ICIO) table: one country, N industries case. Computation of „Trade in Value Added‟ .27 TIEU LUAN MOI download : skknchat@gmail.

Validating export-led growth of Vietnam. Assessing export competitiveness of Vietnam. Measuring Vietnam‟s participation in global value chain .31 CHAPTER 4: SOURCES AND DESTINATIONS OF VALUE ADDED EMBODIED IN GROSS EXPORTS OF VIETNAM. Sources of domestic value added embodied in gross exports.

Destinations of domestic value added embodied in gross exports. Domestic value added embodied in exports by „Types of Goods‟. „Foreign Value Added‟ embodied in gross exports. Sources of foreign value added by partners.

Sources of foreign value added by industries .46 CHAPTER 5: AN EMPIRICAL ANALYSIS OF EXPORT-LED GROWTH OF VIETNAM. Early initiatives and the achievements. Variables and data. Testing presence of unit root and structural break.

Estimating ARDL models and checking their robustness. Bounds test of cointegration and error correction model. Concluding remarks and policy discussion .64 CHAPTER 6: EXPORT COMPETITIVENESS OF VIETNAM .71 Discussing Balassa‟s Index. Export competitiveness of Vietnam in the World .75 TIEU LUAN MOI download : skknchat@gmail.

Export competitiveness of Vietnam in East Asian market. Export competitiveness of Vietnam in NAFTA market. Export competitiveness of Vietnam in European Union (EU). Export competitiveness of Vietnam in ASEAN market.

Export competitiveness of Vietnam in in BRIS (BRICS-China). Concluding remarks and policy discussion .113 CHAPTER 7: WHERE IS VIETNAM IN GLOBAL VALUE CHAIN?. Understanding Global Value Chain. Sources of Data and Study Period.

GVC Participation of Vietnam. GVC Position of Vietnam. GVC Participation, position and domestic value added contribution. Concluding remarks and policy discussions .140 CHAPTER 8: SUMMARY, FINDINGS AND SUGGESTIONS.

Summary and findings. Discussing the issues. Group II industries. Group III industries.

Ways to improve domestic value added exports. Ways to improve export competitiveness. Ways to improve global integration .172 TIEU LUAN MOI download : skknchat@gmail.com LIST OF ACRONYMS USED No. Acronyms Original 1 ADF Augmented Dickey Fuller 2 AO Additive Outlier 3 ARDL Autoregressive Distributive Lag 4 ASEAN Association of South East Asian Nations 5 BI Balassa's Index 6 BRIS Brazil Russia India and South Africa (BRICS minus China) 7 BURT Structural Break Unit Root Test 8 CMT Cut-Make-Trim Comprehensive and Progressive Agreement for Trans-Pacific 9 CPTPP Partnership 10 CURT Conventional Unit Root Test 11 DFD Distance to Final Demand 12 DVA Domestic Value Added 13 DVA_EXGR Domestic Value Added embodied in Gross Exports 14 EC European Commission 15 EU European Union 16 EXGR Gross Exports 17 FDI Foreign Direct Investment 18 FTAs Free Trade Agreements 19 FVA Foreign Value Added 20 GDP Gross Domestic Product 21 GSO General Statistic Office, Vietnam 22 GVC Global Value Chain 23 HDI Human Development Index 24 I2E Importing inputs for exporting (Import to export) i TIEU LUAN MOI download : skknchat@gmail.

Acronyms Original 25 ICIO Inter-country Input Output 26 IO Innovational Outlier International Standard Industrial Classification of All 27 ISIC Economic Activities 28 MNCs Multinational Corporations 29 n. Not Elsewhere Classified 30 NAFTA North Atlantic Free Trade Area 31 OECD Organisation for Economic Cooperation and Development 32 PTAs Preferential Trade Agreements 33 R&D Research and Development 34 RCA Revealed Comparative Advantage 35 RCD Revealed Comparative Disadvantage 36 RSCA Revealed Symmetric Comparative Advantage 37 TFP Total Factor Productivity 38 TiVA Trade in Value Added 39 TU Tribhuvan University 40 UEB University of Economics and Business 41 UNCTAD United Nations Conference on Trade and Development 42 US United States 43 VAR Vector Auto-regression 44 VNU Vietnam National University 45 WTO World Trade Organisation ii TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES No. Table Content Page The equivalence of reported and value added trade 1 Table 2.1: 15 balances at the level of trade with the entire world 2 Table 3.1: List of industries used in the text with their ISIC codes 24 Major sources of DVA exports by merchandised 3 Table 4.1: 37 industries, 2011 Major originators of DVA exports by service industries, 4 Table 4.3: Sources of FVA by industries (major contributors) 46 Major contributors to the value added exports by 6 Table 4.4: 48 industries, 2011 Empirical works using exports and GDP series of 7 Table 5.2: Results of breakpoint unit root tests 60 9 Table 5.3: Results of Breusch-Godfrey Serial Correlation LM Test 61 10 Table 5.4: Results of Bounds Test 62 11 Table 5.5: Results of cointegration equation 63 12 Table 5.6: Results of Wald Test 64 13 Table 5.7: Results of Breusch-Godfrey Serial Correlation LM Test 68 14 Table 5.8: Results of Bounds Test 68 15 Table 5.9: Results of Wald Test 68 16 Table 5.10: Results of breakpoint unit root test for EXGR 69 RCA indices of selected industries in the World market, 17 Table 6.1: 76 2011 Pattern of specialisation by industries in the World 18 Table 6.2: 77 (1995-2011) iii TIEU LUAN MOI download : skknchat@gmail. Table Content Page Results of Galtonian cross-section regression (1995- 19 Table 6.4: RCA indices of Vietnam in the World market 81 21 Table 6.5: RCA indices of selected industries in East Asia, 2011 84 Pattern of specialisation by industries in East Asia 22 Table 6.6: 85 (1995-2011) Results of Galtonian cross-section regression (1995- 23 Table 6.7: 87 2011): East Asia 24 Table 6.8: RCA indices of Vietnam in East Asian market 88 25 Table 6.9: RCA indices of selected industries in NAFTA, 2011 90 Pattern of specialisation by industries in NAFTA (1995- 26 Table 6.10: 91 2011) Results of Galtonian cross-section regression (1995- 27 Table 6.12: RCA indices of Vietnam in NAFTA market 94 29 Table 6.13: RCA indices of selected industries in the EU, 2011 96 Pattern of specialisation by industries in the EU (1995- 30 Table 6.14: 97 2011) Results of Galtonian cross-section regression (1995- 31 Table 6.16: RCA indices of Vietnam in the EU market 100 33 Table 6.17: RCA indices of selected industries in the ASEAN, 2011 102 Pattern of specialisation by industries in ASEAN 34 Table 6.18: 103 (1995-2011) Results of Galtonian cross-section regression (1995- 35 Table 6.20: RCA indices of Vietnam in ASEAN market 106 iv TIEU LUAN MOI download : skknchat@gmail.

Table Content Page 37 Table 6.21: RCA indices of selected industries in BRIS, 2011 108 Pattern of specialisation by industries in BRIS (1995- 38 Table 6.22: 109 2011) Results of Galtonian cross-section regression (1995- 39 Table 6.24: RCA indices of Vietnam in BRIS market 111 41 Table 7.1: Major items of exports, Vietnam (2015) 119 42 Table 7.2: Major items of imports, Vietnam (2015) 120 Selection of industries in which Vietnam has expertise, 43 Table 8.1: 147 year 2011 v TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES No. Figure Content Page 1 Figure 4.1: Shares of DVA & FVA, and growth rates of DVA 35 2 Figure 4.2: Contribution in DVA by merchandised industries 35 3 Figure 4.3: Contribution in DVA by service industries 36 4 Figure 4.4: Destination of DVA exports by regions 39 5 Figure 4.5: Leading markets by regions 39 6 Figure 4.6: Leading markets by countries 42 7 Figure 4.7: DVA by final and intermediate goods and services 43 8 Figure 4.8: Origin of foreign value added by regions and countries 45 9 Figure 5.1: Trends of export and GDP, and their proportion 54 10 Figure 5.2: Growth rates of GDP and Export 54 11 Figure 5.3: CUSUM Test for the chosen ARDL (1, 4) model 62 12 Figure 7.1: A hypothetical flow of trade 122 13 Figure 7.2: GVC Participation of Vietnam by years (1995-2011) 130 Vietnam's participation in GVCs by industries (1995 14 Figure 7.4: Initial look at the GVC position by industry 132 16 Figure 7.5: DFD indices and value added contributions by industry 134 GVC position index and value added contributions by 17 Figure 7.6: 135 industry GVC participation and distance to final demand 18 Figure 7.7: 139 interaction Framework of policy recommendations for greater 19 Figure 8.