An Analysis of Factors Influencing Rice Export in Vietnam Based on Gravity Model
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An Analysis of Factors Influencing Rice Export in Vietnam Based on Gravity Model Thi Hong Hanh Bui 1 & Qiting Chen 1
Received: 3 June 2015 / Accepted: 6 July 2015 # Springer Science+Business Media New York 2015
Abstract Vietnam is known as one of the biggest rice exporters in the world. Rice from Vietnam is available in more than 120 countries and territories in all continents in the world. Vietnam’s exported rice increases quickly in terms of quantities, but its export value is not high and increases slowly. Also, it does not ensure the benefits and incomes for the rice farmers. This makes the rice export of Vietnam not effective, unsustainable, and unstable. In order to describe the processes involved in factors influencing rice export in Vietnam, the present study has used the gravity model with research time from 2004 to 2013. According to hypothesis raised in the chapter, results have revealed that the biggest impacts on Vietnam rice export are gross domestic product (GDP), price, population, and exchange rate. Keywords Vietnam rice . Export . Influence factors . Gravity model
Overview of Vietnam Rice Export Vietnam has started to participate in the world’ rice export market with 1.42 million tons since 1989. Currently, Vietnam is one of the three leading rice export countries in the world, with a supply capacity of nearly 8 million tons per year. According to USDA, Vietnam ranked second in the list of largest rice exporters in the world in 2012 and even was the leading rice producer and exporter in 2010. It illustrated to the rest of the world that Vietnam gained an improvement in its agricultural policy and also showed a new face of Vietnam’s economy. As we can see from the chart below (Fig. 1), the rice export volume has increased from year to year, which is * Thi Hong Hanh Bui [email protected] Qiting Chen [email protected] 1
College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, China
J Knowl Econ
Vietnam Rice Export value (mil USD) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Fig. 1 Vietnam rice export value from 2004–2013. Source: Data from FAO
due to the improvement in productivity of rice production. According to statistics of the Ministry of Natural Resources and Environment, land of paddy fields has been reduced to 30,000 hectares from 2000 to 2010. The reason is mainly due to urbanization, construction and factory infrastructure, and plant replacement. Vietnam became the second largest rice-exporting nation in the world after India (2012). According to Vietnam Food Association (VFA), rice exports from Vietnam in 2012 hit the record of 7.72 million tons with the value of US$3.45 billion while India exported 10 million tons of rice worth around US$6 billion. With natural conditions, climate, favorable soil, as well as abundant labor resources, Vietnam has a lot of competitive advantage in the commercial development of the rice industry. According to the analysis of Ilyas et al. (2
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