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The Asymmetric Effects Of Exchange Rate Volatility On International Trade In A Transition Economy: The Case Of Vietnam

Author

Listed:
  • Loc Dong Truong

    (Can Tho University, Vietnam)

  • Ha Hoang Ngoc Le

    (Can Tho University, Vietnam)

  • Dut Van Vo

    (Can Tho University, Vietnam)

Abstract

This study examines the asymmetric effects of Exchange Rate Volatility (ERV) on Vietnam’s international trade. Using time-series data fitted to the Nonlinear Autoregressive Distributed Lag (NARDL) model, we find that positive changes in ERV have a negative impact on the trade balance in the short-run. On the other hand, increases in ERV have a positive impact on the trade balance in the long-run. We also find that negative changes in ERV do not have any significant effect on the trade balance.

Suggested Citation

  • Loc Dong Truong & Ha Hoang Ngoc Le & Dut Van Vo, 2022. "The Asymmetric Effects Of Exchange Rate Volatility On International Trade In A Transition Economy: The Case Of Vietnam," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(2), pages 203-214, August.
    • Handle: RePEc:idn:journl:v:25:y:2022:i:2d:p:203-214
    DOI: https://doi.org/10.21098/bemp.v25i2.1636
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    References listed on IDEAS

    as
    1. Lira SEKANTSI, 2011. "The Impact of Real Exchange Rate Volatility on South African Exports to the United States (U.S.): A Bounds Test Approach," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 8, pages 119-139, December.
    2. Arize, Augustine C. & Osang, Thomas & Slottje, Daniel J., 2008. "Exchange-rate volatility in Latin America and its impact on foreign trade," International Review of Economics & Finance, Elsevier, vol. 17(1), pages 33-44.
    3. Arize, Augustine C & Osang, Thomas & Slottje, Daniel J, 2000. "Exchange-Rate Volatility and Foreign Trade: Evidence from Thirteen LDC's," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(1), pages 10-17, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Exchange rate volatility; Trade flows; NARDL; Vietnam;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

    Statistics

    Access and download statistics

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