Determinants of Vietnam's rice and coffee exports: using stochastic frontier gravity model

Abstract

Purpose: The paper aims to estimate the factors affecting Vietnam's export in rice and coffee, the two most important agricultural products, especially in exploring the role of “behind-the-border” constraints. Design/methodology/approach: The paper applies the stochastic frontier gravity model, which models the aggregate effect of “behind-the-border” factors for Vietnam's export in rice and coffee. Findings: The paper finds that the impact of “behind-the-border” constraints is statistically significant, suggesting that Vietnam's exports in rice and coffee may be prevented from reaching their export potential by such factors. Moreover, technical efficiency and potential export suggest that Vietnam has a lot of potential to increase its exports in rice and coffee with its major trading partners. The Association of Southeast Asian Nations group continues to be the major market of Vietnamese rice and coffee. Vietnam can also take advantage of the opportunity to export these commodities to the European Union (EU) (not including the UK), and Comprehensive and Progressive Agreement for Trans-Pacific Partnership, especially in coffee to the EU. Research limitations/implications: The study cannot identify specific “behind-the-border” factors due to the limitation of data availability. Originality/value: Many existing studies suggest that export in agricultural products of Vietnam, especially in rice, is significantly affected by natural factors and “explicit beyond-the-border” constraints. They ignore the impact of “behind-the-border” constraints in Vietnam and its trading partners. My study proved the significant impact of such constraints. Therefore, Vietnam needs more policies to remove the “behind-the-border” constraints to promote export in rice and coffee.