Determinants of Intra-Industry Trade for Vietnam’s Manufacturing Industry

Abstract

This study focuses on identifying the country-specifi determinants of intra-industry trade in the manufacturing sector between Vietnam and major trading partners using random effcts estimation. The results indicate that the extent of Vietnam’s intra-industry trade is positively correlated with average country size and average income levels, while it is negatively correlated with income inequality, distance, and trade imbalance. Those factors affct horizontal intraindustry trade (HIIT) and vertical intra-industry trade (VIIT) in the same way except for the effct of income inequality (DPCI) on VIIT with an unexpectedly statistically insignifiant impact. The coeffient of FTA is unexpectedly insignifiant in three estimations, indicating an ambiguous effct of the participation in regional economic integration schemes on the share of IIT, HIIT and VIIT.