Received: 15-04-2013 / Accepted: 18-06-2013
This paper employs Gravity model, first used by Tinbergen (1962), and a panel data of country pairs between Vietnam and her 18 major/stable trading partners in the period from 1995 to 2011. This is for the purpose to assess the impact of the “index of similarity in GDP size” (SIMSIZE in short) on imports and exports of Vietnam. The empirical results show that the index of similarity in GDP size promotes strongly Vietnam’s exports. By contrast, there is no evidence that demonstrates convincingly that this index induces the country’s imports. These investigations can somewhat contribute to the existing literature on the “New Trade Theory”, which was initiated in the late 1970s and in the early 1980s, in terms of testable implications from gravity models that emphasize in the case study between some developing countries.JEL Classifications: F13, F14, F15