Evaluating the International Competitiveness of Vietnam Wood Processing Industry by Combining the Variation Coefficient and the Entropy Method

Abstract

Indicators measuring industrial international competitiveness are being continuously improved. However, so far, there is no unified perfect indicator to measure the level of international competitiveness of the industry. Based on the market share index (MS), trade competitiveness index (TC), revealed comparative advantage index (RCA), and relative trade advantage index (RTA), we constructed a comprehensive international competitiveness index by combining the variation coefficient and the entropy method. This study aims to compare and evaluate the international competitiveness of the wood processing industry (ICWPI) in Vietnam using a comprehensive international competitiveness index. The data is collected from the top 22 countries and the total import and export volume of the wood processing industry from the repository of official international trade statistics (UN Comtrade) database for 2001–2017. The results found that it is more accurate to use the combined variation coefficient and the entropy method to evaluate the international competitiveness of the wood processing industry, compared to using only a single index. The growth rate of international competitiveness of Vietnam increased rapidly from 2001 to 2007 but slowed from 2008 to 2017. Vietnam has the advantages of natural resources, low labor costs and favorable geographical location. However, the low productivity gains and added industry value have led to a gradual decline in the international competitiveness growth rate of Vietnam’s wood processing industry.