Intra-ASEAN trade – Gravity model and Spatial Hausman-Taylor approach

Phung Duy Quang, Pham Anh Tuan, Nguyen Thi Xuan Thu

Abstract

Abstract

This paper examine determinants of intra-industry trade between Vietnam and Asean countries. By solving endogenous problem and applying Hausman-Taylor model for panel two-way dataset, we detect that export flows of Vietnam gravitate to neigboring countries and those with similar GDP. More importantly, the research indicates the existence of spatial-lag interaction.

Key-word: Intra-trade, export, import, gravity model, two-dimensions fixed effect panel model, Hausman-Taylor model, Spatial Hausman - Taylor model

Date of receipt: 25^th Oct.2017; Date of revision: 15^th Mar.2018; Date of approval: 1^st Apr.2018