Impact of Exchange Rate Shocks, Inward FDI and Import on Export Performance: A Cointegration Analysis

Abstract

The study aims to examine the effects of inward every presence of foreign investment, import, and real exchange rate shocks on export performance in Vietnam. This study employs a time-series sample dataset in the period of 2009 -2018. All data are collected from the General Statistics Office of Ministry of Planning and Investment in Vietnam, World Development Indicator and Ministry of Finance, State Bank of Vietnam. This study employs the Augmented Dickey-Fuller test and the vector error correction model with the analysis of cointegration. The results demonstrate that a higher value of import significantly accelerates export performance in the short run, but insignificantly generates in the long run. When the volume of registered foreign investment goes up, the export performance will predominantly decrease in the both short run and long run. Historically, countries worldwide are more likely to devaluate their currencies in order to support export performance. According to the study, the exchange rate volatility has an effect on the external trade in the long run but no effect in the short run. Finally, Vietnam"s export performance converges on its long-run equilibrium by roughly 6.3% with the speed adjustment via a combination of import, every presence of foreign investment, and real exchange rate fluctuations.

Factors Affecting the Competitive Capacity of Commercial Banks: A Critical Analysis in an Emerging Economy

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Factors affecting non-performing loans of commercial banks: the role of bank performance and credit growth

“…A multicollinearity question can arise in the case of a correlation value of 0.8 or greater between two independent variables. That applies to the state of testing for heteroskedasticity (Nguyen & Do, 2020) based on Inflation Factor 10 and under variance (VIF). Table 3 shows the effects of independent variables that do not reach the minimum threshold, and Table 4 states that the VIF coefficient does not surpass the maximum threshold.…”

Real Effective Exchange Rate, Broad Money Supply, and Trade Balance in Vietnam: An Empirical Analysis from Bounds Test to a Cointegration Approach

“…Theoretically, a country's economic transactions with an open economy are reflected in its balance of payments. The exchange rate exists in a close relationship with the balance of payments as well as the with the balance of payments components such as the trade account in the current account (Koivu and García-Herrero, 2007;Nguyen and Do, 2020;Kamran et al, 2020). Numerous studies have given many theoretical frameworks related to trade balance in the world.…”

“…Vietnam's economy is growing strongly and integrating deeply into the world economy with the trade balance being improved recently after a long period of deficit, bad debts in the banking system, and instable economic policies including the exchange rate policy (Nguyen and Do, 2020;Dao et al, 2020). In this case, the question "is the current exchange rate suitable?"…”

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