Improving Agricultural Export Policies in Developing Countries: An Application of Gravity Modelling in the Case of Vietnam’s Fishery Export

DOI 10.7160/aol.2020.120402
No 4/2020, December
pp. 15-27

Do, M. H. and Park, S. C. (2020) “Improving Agricultural Export Policies in Developing Countries: An Application of Gravity Modelling in the Case of Vietnam’s Fishery Export", AGRIS on-line Papers in Economics and Informatics, Vol. 12, No. 4, pp. 15-27. ISSN 1804-1930. DOI 10.7160/aol.2020.120402.


This paper investigates the determinants of fishery export from Vietnam using a structural gravity modelling. Taken additional trade-related variables from the World Bank’s open data into the estimation of the gravity model, this research will be the first trial to examine the impacts of these variables on export of fishery products and to propose policy implications for stimulating export in Vietnam. The empirical results show that each 1% reduction of export costs might increase approximately 3.7% of the export value of fishery products. This finding is critical because the current administrative system for export of agricultural commodity in Vietnam consists of many stages and includes a long period of animal quarantine inspection, document checking, and customs clearance that might cause additional export costs. Therefore, policies aiming at reducing the costs of border and documentary compliance for export will be significant to stimulate export in developing countries as Vietnam.


Fishery export, export policy, free trade agreement, gravity model, random effect estimation, Vietnam.


  1. Allison, E. H. and Ellis, F. (2001) “The livelihoods approach and management of small-scale fisheries”, Marine Policy, Vol. 25, No. 5, pp. 377-388. ISSN 0308-597X. DOI 10.1016/S0308-597X(01)00023-9.
  2. Anderson, J. E. and Van Wincoop, E. (2003) “Gravity with gravitas: a solution to the border puzzle”, American Economic Review, Vol. 93, No. 1, pp. 170-192. E-ISSN 1944-7981, ISSN 0002-8282. DOI 10.1257/000282803321455214.
  3. Backhaus, A., Martinez-Zarzoso, I., and Muris, C. (2015) “Do climate variations explain bilateral migration? A gravity model analysis”, IZA Journal of Migration, Vol. 4, No. 1, pp. 1-15. DOI 10.1186/s40176-014-0026-3.
  4. Bakucs, Z., Benedek, Z., and Fertö, I. (2019) "Spatial Price Transmission and Trade in the European Dairy Sector", AGRIS on-line Papers in Economics and Informatics, Vol. 11, No. 2, pp. 13-20. ISSN 1804-1930. DOI 10.7160/aol.2019.110202.
  5. Baldwin, R. E. (1994) “Towards an integrated Europe”, London: Centre for Economic Policy Research, 234 p. ISBN 978-1898128137.
  6. Baltagi, B. H., Egger, P. and Pfaffermayr, M. (2003) “A generalized design for bilateral trade flow models”, Economics Letters, Vol. 80, No. 3, p. 391-397. ISSN 0165-1765. DOI 10.1016/S0165-1765(03)00115-0.
  7. Betcherman, G. and Marschke, M. (2016) “Coastal livelihoods in transition: How are Vietnamese households responding to changes in the fisheries and in the economy?”, Journal of Rural Studies, Vol. 45, pp. 24-33. ISSN 0743-0167. DOI 10.1016/j.jrurstud.2016.02.012.
  8. Braha, K., Qineti, A., Cupák, A. and Lazorcáková, E. (2017) “Determinants of Albanian Agricultural Export: The Gravity Model Approach", AGRIS on-line Papers in Economics and Informatics, Vol. 9, No. 2, pp. 3-21. ISSN 1804-1930. DOI 10.7160/aol.2017.090201.
  9. Breuss, F. and Egger, P. (1999) “How reliable are estimations of East-West trade potentials based on cross-section gravity analyses?”, Empirica, Vol. 26, No. 2, pp. 81-94. E-ISSN 1573-6911, ISSN 0340-8744. DOI 10.1023/A:1007011329676.
  10. Cardoso, B. F., Rasetti, M., Giampietri, E., Finco, A. and Shikida, P. F. A. (2017) "Trade Dynamics in the Italian Floriculture Sector within EU Borders: A Gravity Model Analysis", AGRIS on-line Papers in Economics and Informatics, Vol. 9, No. 2, pp. 23 - 32. ISSN 1804-1930. DOI 10.7160/aol.2017.090202.
  11. Deardorff, A. (1998) “Determinants of bilateral trade: does gravity work in a neoclassical world?”, The regionalization of the world economy (pp. 7-32), University of Chicago Press. [Online]. Available: [Accessed: 03 Jul. 2019].
  12. Do, M. H. and Park, S. Ch. (2018) “New Rural Development and Hierarchical Governance in Vietnam: Impacts of government support on rural households’ income using a Hierarchical Linear Modelling", AGRIS on-line Papers in Economics and Informatics, Vol. 10, No. 4, pp. 3-15. ISSN 1804-1930. DOI 10.7160/aol.2018.100401.
  13. Do, M. H. and Park, S. C. (2019) “Impacts of Vietnam’s new rural development policy on rural households’ income: empirical evidence from the Heckman selection model”, International Review of Public Administration, pp. 1-17. E-ISSN 2331-7795, ISSN 1229-4659. DOI 10.1080/12294659.2019.1662165.
  14. EC (2019) “Trade Policy – Vietnam”, The European Commission (EC). [Online]. Available: [Accessed: 25 Apr. 2019].
  15. EU (2019) “Guide to the EU – Vietnam Free Trade Agreement”, The European Union (EU). [Online]. Available: [Accessed: 25 Apr. 2019].
  16. Feenstra, R. C., Markusen, J. R. and Rose, A. K. (2001) “Using the gravity equation to differentiate among alternative theories of trade”, Canadian Journal of Economics/Revue canadienne d'économique, Vol. 34, No. 2, pp. 430-447. E-ISSN 1540-5982. DOI 10.1111/0008-4085.00082.
  17. Gómez-Herrera, E. (2013) “Comparing alternative methods to estimate gravity models of bilateral trade”, Empirical Economics, Vol. 44, No. 3, pp. 1087-1111. E-ISSN 1435-8921, ISSN 0377-7332. DOI 10.1007/s00181-012-0576-2.
  18. Gopinath, M. and Echeverria, R. (2004) “Does economic development impact the foreign direct investment-trade relationship? A gravity-model approach”, American Journal of Agricultural Economics, Vol. 86, No. 3, pp. 782-787. E-ISSN 1467-8276. DOI 10.1111/j.0002-9092.2004.00625.x.
  19. GSO (2017) “Main Result from Vietnam Agriculture Census – 2016”, General Statistics Office of Vietnam (GSO). [Online]. Available: [Accessed: 25 Apr. 2019]. (In Vietnamese)
  20. Hndi, B. M., Maitah, M. and Mustofa, J. (2016) “Trade Impacts of Selected Free Trade Agreements on Agriculture: The Case of Selected North African Countries", AGRIS on-line Papers in Economics and Informatics, Vol. 8, No. 3, pp. 39 - 50. ISSN 1804-1930. DOI 10.7160/aol.2016.080304.
  21. Henderson, D. J. and Millimet, D. L. (2008) “Is gravity linear?”, Journal of Applied Econometrics, Vol. 23, No. 2, pp. 137-172. ISSN 1099-1255. DOI 10.1002/jae.974.
  22. ITC (2019) “Trade Map – International Trade Statistics” The International Trade Centre (ITC). [Online]. Available: [Accessed: 25 Apr. 2019].
  23. Kepaptsoglou, K., Karlaftis, M. G. and Tsamboulas, D. (2010) “The gravity model specification for modeling international trade flows and free trade agreement effects: a 10-year review of empirical studies”, The Open Economics Journal, Vol. 3, No. 1. ISSN 1874-9194. DOI 10.2174/1874919401003010001.
  24. Lampe, M. (2008) “Bilateral trade flows in Europe, 1857–1875: A new dataset”, Research in Economic History, pp. 81-155, Emerald Group Publishing Limited. E-ISBN 978-1-84855-337-8, ISBN 978-1-84855-336-1. DOI 10.1016/S0363-3268(08)26002-7.
  25. Linescape (2019) “Online platform for finding ocean container shipping routes and schedules”. [Online]. Available: [Accessed: 25 Apr. 2019].
  26. Maciejewski, M. and Wach, K. (2019) “What Determines Export Structure in the EU Countries?: the Use of Gravity Model in International Trade Based on the Panel Data for the Years 1995-2015”, Journal of International Studies, Vol. 12, No. 1, pp. 151-167. E-ISSN 2306-3483, ISSN 2071-8330. DOI 10.14254/2071-8330.2019/12-1/10.
  27. MARD (2019) “Monthly Statistic Report of Agricultural Sector“, The Ministry of Agriculture and Rural Development of Vietnam (MARD). [Online]. Available: [Accessed: 25 Apr. 2019]. (In Vietnamese).
  28. McCallum, J. (1995) “National borders matter: Canada-US regional trade patterns”, The American Economic Review, Vol. 85, No. 3, pp. 615-623. E-ISSN 1944-7981, ISSN 00028282.
  29. MPI (2019) “Statistics of Foreign Direct Investment in Vietnam”, The Ministry of Planning and Investment of Vietnam (MPI). [Online]. Available: [Accessed: 25 Apr. 2019]. (In Vietnamese).
  30. Nguyen, T. V., Nguyen, N. C. and Bosch, O. J. (2015) “Applying a systems thinking approach to address the barriers affecting the Vietnamese coffee export industry", International Journal of Business and Management Review, Vol. 3, No. 4, pp. 49-65. E-ISSN 2052-6407, ISSN 2052-6393.
  31. Prehn, S., Brümmer, B. and Glauben, T. (2016) “Gravity model estimation: fixed effects vs. random intercept Poisson pseudo-maximum likelihood”, Applied Economics Letters, Vol. 23, No. 11, pp. 761-764. E-ISSN 1466-4291, ISSN 1350-4851. DOI 10.1080/13504851.2015.1105916.
  32. Rose, A. K. (2000) “Currency unions-one money, one market: the effect of common currencies on trade”, Economic Policy, Vol. 15, No. 30, pp. 7-45. E-ISSN 1468-0327. ISSN 0266-4658.
  33. Sapir, A. (2001) “Domino effects in Western European regional trade, 1960–1992”, European Journal of Political Economy, Vol. 17, No. 2, pp. 377-388. ISSN 0176-2680. DOI 10.1016/S0176-2680(01)00032-5.
  34. Shepherd, B. (2016) “The Gravity Model of International Trade: A User Guide”, Economics and Social Commission for Asia and the Pacific (ESCAP)”. [Online]. Available: [Accessed: 25 Jun. 2019].
  35. Siliverstovs, B. and Schumacher, D. (2009) “Estimating gravity equations: to log or not to log?”, Empirical Economics, Vol. 36, No. 3, pp. 645-669. E-ISSN 1435-8921, ISSN 0377-7332. DOI 10.1007/s00181-008-0217-y.
  36. Soloaga, I. and Wintersb, L. A. (2001) “Regionalism in the nineties: What effect on trade?”, The North American Journal of Economics and Finance, Vol. 12, No. 1, pp. 1-29. ISSN 1062-9408. DOI 10.1016/S1062-9408(01)00042-0.
  37. Tinbergen, J. J. (1962) “Shaping the world economy; suggestions for an international economic policy”. [Online]. Available: [Accessed: 26 Apr. 2019].
  38. The World Bank. (2019) “World Bank Open Data" [Online]. Available: [Accessed: 25 Apr. 2019].
  39. Wach, K. and Wojciechowski, L. (2016) “Determinants of inward FDI into Visegrad countries: empirical evidence based on panel data for the years 2000-2012”, Economics and Business Review, Vol. 2, No. 1, pp. 34-52. E-ISSN 2450-0097, ISSN 2392-1641. DOI 10.18559/ebr.2016.1.3.
  40. WTO (2019) “Tariff Analysis Online”, The World Trade Organisation (WTO). [Online]. Available: [Accessed: 25 Apr. 2019].

Full paper

  Full paper (.pdf, 566.52 KB).