Beyond the seams: evaluating competitiveness and comparative advantage in Vietnam’s apparel industry

Abstract

Purpose This study aims to examine the export competitiveness of Vietnam’s apparel sector by identifying the precise product categories that create its comparative advantage. Design/methodology/approach Revealed comparative advantage (RCA) and normalized revealed comparative advantage (NRCA) form the research methodology, and the RCA/NRCA values are calculated for the 2011–2020 period. Findings In total, 29 out of 34 product categories at four-digit levels and 65 out of 217 subcategories at six-digit levels elicited a consistent export comparative advantage throughout the 10-year study timeframe. The study also identified 13 subcategories at six-digit levels, which indicated 10 consecutive years of relative disadvantages. Research limitations/implications The study’s findings have far-reaching implications for economic policy, development strategies and global economic integration. By providing a nuanced understanding of a country’s export strengths in the international apparel trade, this study offers valuable guidance for informed decision-making at various levels. The findings will serve as a significant source of information for policymakers and help them formulate novel policies aiming to diversify Vietnam’s apparel product offerings and export destinations. The results will also inform the government regarding the industry’s potential and attract necessary support, enabling it to grow further. This study reveals patterns in Vietnam’s apparel trade but does not provide insights into the underlying causes of comparative advantage. Originality/value The study provides an in-depth overview of Vietnam’s comparative advantages and disadvantages at two-, four- and six-digit harmonized system levels and helps understand Vietnam’s apparel export competitiveness.