Comparative advantages of some key industries in Vietnam when participating in international trade

Abstract

David Ricardo laid the groundwork for the development of trade theories. His theory of comparative advantage is still applied to today’s practice. The theory of comparative advantage helps the nation to identify and continue to promote its potentials as well as to recognize weaknesses to overcome them. To identify the comparative advantage, many tools of measurement can be used. There are two indicators: the revealed comparative advantage index RCA and the partnership commercial advantage index PCA. The team’s article will introduce the concept, measurement formula as well as the relationship between these two metrics. Simultaneously, the RCA is calculated in three categories: textiles, footwear and furniture of Vietnam and the PCA of Vietnam for US counterparts in 2011-2016 to make comments on comparative advantages of Vietnam.