Does the trade gravity model depend on trading partners? Some evidence from Vietnam and her 54 trading partners

- Bilateral trade reacts more to high income trading partners than those with low income.
- High income Asia, Europe, America, and Oceania matter more for Vietnamese trade.
- Trade with the ASEAN and APEC members strongly enhances bilateral trade.
- WTO's impact is positive if Vietnam's trade is with low income member countries.

This paper finds that the influence of trade gravity variables is dependent on trading partners. For instance, trade with rich nations is more sensitive to distance, economic size, and trading partners, openness of trading partners, and exchange rate, than trade with low income nations. Nonetheless, the paper suggests that the trade policy should not ignore the importance of the level of development, maintenance of close economic ties, and the influence of the ASEAN, APEC, and the WTO on trade in the long and short run. This is found for the bilateral trade relations between Vietnam and her top 54 trading partners over the period 1986 to 2010.