Intra-ASEAN trade – Gravity model and Spatial Hausman-Taylor approach

Abstract This paper examine determinants of intra-industry trade between Vietnam and Asean countries. By solving endogenous problem and applying Hausman-Taylor model for panel two-way dataset, we detect that export flows of Vietnam gravitate to neigboring countries and those with similar GDP. More importantly, the research indicates the existence of spatial-lag interaction. Key-word: Intra-trade, export, import, gravity model, two-dimensions fixed effect panel model, Hausman-Taylor model, Spatial Hausman - Taylor model Date of receipt: 25th Oct.2017; Date of revision: 15th Mar.2018; Date of approval: 1st Apr.2018