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http://dx.doi.org/10.13106/jafeb.2021.vol8.no5.0061

The Impact of Exchange Rate on Exports and Imports: Empirical Evidence from Vietnam  

NGUYEN, Nga Hong (Head of Economics Department, Faculty of Economics, University of Economics and Law, National University Ho Chi Minh City)
NGUYEN, Hat Dang (Department of Business Administration, Faculty of Economics and Management, Hong Bang International University)
VO, Loan Thi Kim (Department of Political Economy, Faculty of Basic Science, Van Lang University)
TRAN, Cuong Quoc Khanh (Department of Economics, Faculty of Basic Science, Van Lang University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.5, 2021 , pp. 61-68 More about this Journal
Abstract
The exchange rate is considered a tool improving the volume of exports and reducing imports. This paper aims to determine the impact of the exchange rate on exports and imports between Vietnam and the United States in the context of the trade war. The research uses Autoregressive Distributed Lag (ARDL) and Nonlinear Autoregressive Distributed Lag (NARDL) Model in the time-series data from 2010:1 to 2020:9. The ARDL's results support that real exchange rate impact on export and import volumes, but less than the trade war. The trade war helps trade balance increase 0.35%, while the exchange rate increases trade balance 0.191% when the Vietnamese currency devalues 1% in the long run. In the short term, the real exchange rate makes the trade balance decrease. Therefore, the J curve exists between Vietnam and the U.S. The NARDL expresses that the exchange rate is asymmetric both in the short term and the long term. The findings of this study point to two important elements. Firstly, the exchange rate plays a minor role in exports and imports. Secondly, trade war plays a vital role in increasing exports and imports volume between two countries, and the J curve exists between the two countries.
Keywords
Exchange Rate; Trade War; NARDL; Vietnam; Asymmetric;
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