Full Citation
Title: The Impacts of Trade Liberalization on Poverty in Vietnam
Citation Type: Miscellaneous
Publication Year: 2017
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Abstract: The study examines the effect of trade liberalization on poverty reduction across 60 provinces in Vietnam over a decade from 2002 to 2012 using fixed effects approach. In this study, trade liberalization is proxied by tariff exposure, which is constructed by combining information on geographic variation in the sector composition of the economy and temporal variation in tariff lines by product category. This yields a measure indicating how changes in exposure to tariff reductions vary by geographic area over the period 2002 and 2012. Taking advantage of the available multi-province and six-year dataset, the study includes a set of fixed effects: the province-fixed effects, which capture potential unobservable characteristics that are likely to affect poverty reduction, such as historical and institutional factors; and the time-fixed effects, which controls for aggregate time trend. The results indicate the statistically significant and positive correlation between tariff exposure and poverty, showing that exposure to trade liberalization is associated with poverty reduction and provinces being relatively more exposed to trade liberalization have experienced a stronger reduction in poverty. It is also found that tariff reductions have contributed to the reduction of the depth and severity of poverty in Vietnam. The results are robust to specification and controlling for region dummies and provincial characteristics. While there have been a limited number of studies on the relation between trade liberalization and poverty, poverty gap and poverty severity, the study is expected to make an empirical contribution to the literature of trade liberalization as well as development economics.
Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2989415
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Authors: Nguyen, Thanh
Publisher: CIEM
Data Collections: IPUMS USA
Topics: Housing and Segregation, Other
Countries: United States