Thesis Public Defense | VNP26 - Hoàng Thị Ngọc Thắng

Impact of the free trade agreements on Vietnam’s pharmaceutical import: An application of the gravity model

Student: Hoàng Thị Ngọc Thắng, VNP26

Supervisor: Dr. Hồ Hoàng Anh

Abstract:

This paper evaluates the impact of free trade agreements on the pharmaceutical imports of Vietnam. We apply the gravity model to a panel data of 112 countries for the period 2000-2018. To solve two potential problems of the gravity model created by heteroscedasticity and zero trade values, we employ the standard Poisson Pseudo Maximum Likelihood (PPML) estimator. We also add the fixed effect and lagged effect in the model to mitigate potential endogeneity. Our results demonstrate that free trade agreements can increase Vietnam’s pharmaceutical imports. However, each separate agreement has a different impact. In addition, we find that the impacts of trade agreements can change over
time.

Keywords: FTA, Pharmaceutical import, Gravity model, PPML
JEL code: F13; I18;