Abstract
ABSTRACT A new regression-based revealed comparative advantage (RCA) index is used to analyze Vietnam’s export. Vietnam has the highest RCA in electronics, surpassing Japan, South Korea and China. It suggests that Vietnam may be a new follower of the “flying geese” style and reinforce the view that inward FDI can change comparative advantage if the magnitude is sufficiently large. With detailed FDI and local data, we estimate the FDI which made this happen was roughly 6% of GDP. Lastly, we opine that while RCA in footwear may decline if wages rise, that in electronics may be here to stay.
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