Economic Cooperation in the Greater Mekong Sub-Region

Binh Hai Le (), Dang Quyen Nguyen (), Kieu Trang Vu (), Hiep Ngoc Luu () and Farhad Taghizadeh-Hesary ()
Additional contact information
Binh Hai Le: Diplomatic Academy of Vietnam, Vietnam, Postal: Deputy Director, Diplomatic Academy of Vietnam, 69 Chua Lang, Hanoi, Vietnam
Dang Quyen Nguyen: Centre for Applied Economics and Business Research, Vietnam, Postal: Researcher, Centre for Applied Economics and Business Research, 70 Nam Dong, Hanoi, Vietnam
Kieu Trang Vu: Centre for Applied Economics and Business Research, Vietnam, Postal: Researcher, Centre for Applied Economics and Business Research, 70 Nam Dong, Hanoi, Vietnam
Hiep Ngoc Luu: University of St Andrews, UK, Postal: Researcher, University of St Andrews, The Gateway, North Haugh, St Andrews, UK, and Centre for Applied Economics and Business Research, 70 Nam Dong, Hanoi, Vietn

Journal of Economic Integration, 2020, vol. 35, issue 2, 240-263

Abstract: This paper investigates the impact of regional economic cooperation between Vietnam and its partners during the 2000-2015 period, focusing on the Greater Mekong Sub-region (GMS). Overall, the GMS represents a significant portion of Vietnam’s trade portfolio. China is the dominant trading partner in the GMS, exhibiting strong influence over Vietnam’s trade, especially its imports. However, using the gravity model of trade, we find that Vietnam has not benefited from GMS cooperation, as exemplified by its significant trade deficit, particularly with China. We further find that human capital enhancement and financial development are key factors to facilitate Vietnam’s trade, and mitigate its trade deficit with other GMS member countries. To this end, this study provides some important policy implications for the Vietnamese government as well as policymakers in other countries, when trading with larger partners in the context of regional economic cooperation.

Keywords: Regional Economic Cooperation; Greater Mekong Sub-region; Vietnam; Trade; Gravity Model (search for similar items in EconPapers)
JEL-codes: C23 F13 F15 O53 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0798

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