Determinants and Potential of Seafood Trade: Evidence from a Transitional Economy
| Published date | 01 August 2023 |
| DOI | http://doi.org/10.1177/00157325221077003 |
| Author | Chung Van Dong,Hoan Quang Truong |
| Date | 01 August 2023 |
| Subject Matter | Articles |
Determinants and
Potential of Seafood
Trade: Evidence from a
Transitional Economy
Chung Van Dong1 and Hoan Quang Truong2
Abstract
This study, by employing an augmented gravity model under the Poisson pseudo-
maximum-likelihood (PPML) estimation, aims to scrutinise the determinants and
potential of seafood exports from Vietnam—a transitional and emerging economy
to the global market over the period of 2000–2018 at both aggregate and sectoral
levels. With remarkable growth over the years, Vietnam has become the largest sea-
food exporter in Southeast Asia. The country’s seafood exports have been diversified
in terms of export structure and export markets. The estimation results show that
the size of economies and market development from importers are the main factors
that are driving Vietnam’s total seafood exports. At the sectoral level, the magnitude
of the effects of income per capita significantly differs among the subsectors of sea-
food. We find that the impacts of factors such as region, access to the World Trade
Organization (WTO) and the free trade agreement (FTA) establishment on Vietnam’s
seafood exports are heterogeneous. We found that there is still room for the expan-
sion of Vietnam’s seafood exports to some market destinations. This article suggests
a dynamic strategy to increase Vietnam’s seafood exports in the coming years.
JEL Codes: F1, F14, Q1
Keywords
Seafood exports, determinants, potential, Vietnam
Article
1 Institute of World Economy and Politics, Vietnam Academy of Social Sciences, Hanoi, Vietnam.
2 Institute for Southeast Asian Studies, Vietnam Academy of Social Sciences, Hanoi, Vietnam.
Corresponding author:
Hoan Quang Truong, Institute for Southeast Asian Studies, Vietnam Academy of Social Sciences, 9th
Floor, 176 Thai Ha, Dong Da, Hanoi, Vietnam.
E-mail: quanghoan2310@gmail.com
Foreign Trade Review
58(3) 428–454, 2023
© 2022 Indian Institute of
Foreign Trade
Article reuse guidelines:
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DOI: 10.1177/00157325221077003
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Dong and Truong 429
Introduction
Seafood is one of the most crucial traded food products. According to the United
Nations Conference on Trade and Development (UNCTAD), the world’s seafood
exports amounted to US$158.91 billion in 2018 compared to US$51.44 billion in
2000. Statistically, in 2018, the share of seafood exports accounted for 10.15% of
global food exports; of which the contribution of Asian developing economies to
the world’s seafood exports was large (38.71%).
Among developing economies, Vietnam offers an interesting case study.
Following the Doi Moi (reform) pinned on market orientation since the 1990s,
Vietnam has increasingly engaged in international and regional economic activi-
ties, particularly via bilateral and multilateral free trade agreements (FTAs). The
most notable events include Vietnam’s participation in the Association of
Southeast Asian Nations (ASEAN) in 1995, the signing of the Vietnam–United
States (USA) Bilateral Trade Agreement in 2000 and Vietnam’s accession to the
World Trade Organization (WTO) in 2007. Vietnam ratified the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in November
2018 as well as the European Union (EU)–Vietnam FTA (EVFTA) in August
2020. The EVFTA is an ambitious pact that provides almost 99% of the elimina-
tion of customs duties between the EU and Vietnam which is expected to pave the
way for increased trade between the two sides (Tran et al., 2020). As a result, the
country has been considered a successful export-led growth economy in Southeast
Asia. Going along with the extraordinary enlargement of the entire export picture,
Vietnam’s seafood exports to the global market had extensively increased over
time, touching nearly US$9.84 billion in 2018 from only US$457.71 million in
1995. This made the country the largest seafood exporter in Southeast Asia even
though the share of seafood products in Vietnam’s total exports had a decreasing
tendency, accounting for 10.14%, 5.91% and 4.21% in 2000, 2010 and 2018,
respectively. More impressively, Vietnam has improved its position in the interna-
tional market for seafood products when there was a decline in the proportion of
developing Asian economies. In addition, the expansion of seafood products has
significantly contributed to the economic growth and the creation of new jobs as
well as to the national programme of eliminating hunger and reducing poverty in
Vietnam (Loc et al., 2010; Marschke & Betcherman, 2016; Pomeroy et al., 2009).
Given the context mentioned above, there are interesting and important ques-
tions. First, how has Vietnam’s export pattern evolved over the last few decades?
Second, what are the determinants of seafood exports from Vietnam to partner
countries? Third, is there heterogeneity in the effects of the estimation parameters
on Vietnam’s seafood exports in different subsectors? Fourth, is there a significant
room for Vietnam to expand its seafood exports to partner countries? These ques-
tions are crucial for policymakers and the business sector in making appropriate
policies and decisions, particularly regarding the selection of export destinations
for Vietnam’s seafood products.
Our current article, by employing an approach of gravity model using the
Poisson pseudo-maximum-likelihood (PPML) method, aims to examine the
effects of factors such as scale of economies, market development, physical
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