TABLE OF CONTENTSLIST OF ACRONYMS.................................................................................................... iLIST OF TABLES .......................................................................................................... iiLIST OF FIGURES........................................................................................................ iiiINTRODUCTION........................................................................................................... 11. Abstract ................................................................................................................. 12. Research background and rational ........................................................................ 13. Research objectives ............................................................................................... 3Research aims............................................................................................................... 3Research objectives...................................................................................................... 3Research Questions ...................................................................................................... 4The scope of the research............................................................................................. 4Research method .......................................................................................................... 4Research structure ........................................................................................................ 4CHAPTER 1. Literature review ...................................................................................... 61.1. Overview of agricultural products and agricutural products export ..................... 61.1.1. Overview of agricultural products .................................................................. 61.1.1.1. Definition.................................................................................................. 61.1.1.2. Characteristics of agricultural products.................................................... 81.1.2. Overview of agricultural products export....................................................... 91.1.2.1. Some theories of international trade......................................................... 9a. The theory of comparative advantage............................................................ 9b. HeckcherOhlin Theory ............................................................................... 111.1.2.2. Definition and the importance of agricultural products export.............. 12a. Definition of agricultural products export ................................................... 12b. Role of agricultural products export in Vietnam’s economy....................... 131.2. Overview of exchange rate. ................................................................................ 151.2.1. Definition of Exchange rate.......................................................................... 151.2.2. Types of exchange rate. ................................................................................ 151.2.2.1. Based on the object to determine the exchange rate .............................. 15a. Official exchange rate .................................................................................. 15b. Market exchange rate................................................................................... 161.2.2.2. Based on payment term .......................................................................... 16a. Spot exchange rate ....................................................................................... 16b. Forwards exchange rate ............................................................................... 161.2.2.3. Based on the value of the exchange rate ................................................ 16a. Nominal exchange rate (NER) ..................................................................... 16b. Real Exchange rate (RER) ........................................................................... 161.3. Literature review of domestic and abroad researches......................................... 171.3.1. Literature review of abroad researches......................................................... 171.3.2. Literature review of domestic researches. .................................................... 18CHAPTER 2. RESEARCH METHODOLOGY........................................................... 202.1. Research objectives Research questions........................................................... 202.2. Research hypothesis............................................................................................ 202.3. Research methodology........................................................................................ 222.3.1. Research methodology.................................................................................. 222.3.2. Data collection .............................................................................................. 222.3.3. Data processing method................................................................................ 252.3.3.1. Unit root test........................................................................................... 252.3.3.2. Cointergration test................................................................................. 252.3.3.3. Causality test .......................................................................................... 262.3.3.4. VAR model and VEC model.................................................................. 272.3.3.5. Evaluation of reliability and accuracy data sources............................... 28CHAPTER 3. Research results...................................................................................... 323.1. Situation of Vietnam’s agricultural products export........................................... 323.1.1. Situation of Vietnam’s agricultural products export in the period 20152019................................................................................................................................. 323.1.2. Situation of Vietnam’s agricultural main products export to the EU market inthe period 20152019.............................................................................................. 333.2. Situation of EURVND exchange rate in the period of 20152019.................... 403.3. The influence of EURVND exchange rate (Ex) on Vietnamese agricultural mainproducts exports (EVN) to the EU market................................................................. 403.3.1. Unit root test ................................................................................................. 403.3.2. Cointergration test ....................................................................................... 433.3.3. Determine the lag length upon VAR model ................................................. 443.3.4. Vector Error Correction Model (VEC model).............................................. 453.3.5. Vector Autoregressive model (VAR model) ................................................ 473.3.6. Granger causality test ................................................................................... 50CHAPTER 4. Conclusion and some recommendations................................................ 524.1. Conclusions ......................................................................................................... 524.2. Some recommendations to improve Vietnamese agricultural products export tothe EU market and enhance competitiveness of Vietnamese agricultural industry... 534.2.1. For the government........
DANANG UNIVERSITY DANANG UNIVERSITY OF ECONOMICS INTERNATIONAL BUSINESS DEPARTMENT BACHELOR’S THESIS: ASSESSING THE INFLUENCE OF EXCHANGE RATE ON VIETNAMESE AGRICULTURAL EXPORT VALUE GRADUATION THESIS Da Nang, 05/2022 DANANG UNIVERSITY DANANG UNIVERSITY OF ECONOMICS INTERNATIONAL BUSINESS DEPARTMENT BACHELOR’S THESIS ASSESSING THE INFLUENCE OF EXCHANGE RATE ON VIETNAMESE AGRICULTURAL Major : INTERNATIONAL BUSINESS Instructors : NGUYEN THI THUY - DOCTOR Author : HO THANH BAO Class : 44K01.1 GRADUATION THESIS Da Nang, 05/2022 SUMMARY OF THE GRADUATION THESIS The goal of this article is to assess the impact of the EUR/VND exchange rate on the value of Vietnamese agricultural major goods exported to the EU market (EVN) using the Cointegration test, the Granger causality test, and the VAR/VEC model The findings show that there is only one co-integrating equation between two variables It means that the exchange rate has an effect on EVN in the long run Furthermore, in the short run, there is one Granger causality relationship between the VND/USD exchange rate and the EVN, but not vice versa Overall, the impact of the EUR/VND exchange rate on the value of Vietnamese agricultural major products exported to the EU market (EVN) has been thoroughly examined in this study using novel methodologies The findings in this study will be highly useful for Vietnamese farmers, exporters, and stakeholders in investment and risk management, as well as the Vietnam government in policymaking APPRECIATION First, the author would like to thank the teachers of Danang University of Economics for the knowledge that they have equipped the author to serve well for this graduation thesis In particular, the author would like to especially express his deep respect and gratitude to the scientific guide - Dr Nguyen Thi Thuy, who wholeheartedly guided and helped the author during the process of choosing the topic, Outline, finalize and edit the article I would also like to thank all of my friends and family for their ongoing support and understanding while I was conducting research and composing my project And finally, I would love to give my honest appreciation toward Tra Lien, who has given me the efford to keep on going and try my best to fulfill my thesis at the end GUARANTEE I hereby declare that the topic "ASSESSING THE INFLUENCE OF EXCHANGE RATE ON VIETNAMESE AGRICULTURAL" is my independent research work under the guidance of my instructor: Dr Nguyen Thi Thuy Actual research content is not copied from others The topic and content of the internship report are products that I have researched with great effort during my study at the school The data and results presented in the report are completely honest, I would like to take full responsibility and discipline of the subject and the school if there is a problem Da Nang, 24/05/2022 Author (Signature with full name) Ho Thanh Bao INSTRUCTOR’S COMMENT Da Nang, 24/05/2022 Instructor REVIEW LECTURER’S COMMENT Da Nang, 24/05/2022 Review lecturer TABLE OF CONTENTS LIST OF ACRONYMS i LIST OF TABLES ii LIST OF FIGURES iii INTRODUCTION 1 Abstract Research background and rational Research objectives Research aims Research objectives Research Questions The scope of the research Research method Research structure CHAPTER Literature review 1.1 Overview of agricultural products and agricutural products export 1.1.1 Overview of agricultural products 1.1.1.1 Definition 1.1.1.2 Characteristics of agricultural products 1.1.2 Overview of agricultural products export 1.1.2.1 Some theories of international trade a The theory of comparative advantage b Heckcher-Ohlin Theory 11 1.1.2.2 Definition and the importance of agricultural products export 12 a Definition of agricultural products export 12 b Role of agricultural products export in Vietnam’s economy 13 1.2 Overview of exchange rate 15 1.2.1 Definition of Exchange rate 15 1.2.2 Types of exchange rate 15 1.2.2.1 Based on the object to determine the exchange rate 15 a Official exchange rate 15 b Market exchange rate 16 1.2.2.2 Based on payment term 16 a Spot exchange rate 16 b Forwards exchange rate 16 1.2.2.3 Based on the value of the exchange rate 16 a Nominal exchange rate (NER) 16 b Real Exchange rate (RER) 16 1.3 Literature review of domestic and abroad researches 17 1.3.1 Literature review of abroad researches 17 1.3.2 Literature review of domestic researches 18 CHAPTER RESEARCH METHODOLOGY 20 2.1 Research objectives - Research questions 20 2.2 Research hypothesis 20 2.3 Research methodology 22 2.3.1 Research methodology 22 2.3.2 Data collection 22 CHAPTER CONCLUSION AND SOME RECOMMENDATIONS 4.1 Conclusions The study capture the effect of EUR/VND exchange rate on Vietnamese agricultural main products export value to EU market by using Co-integration test, VAR/VEC model, and Granger causality test in an effort to overcome the research subject's constraints and the lack of a multiple regression model in earlier studies On that basis, the following are the study's primary conclusions: First, the study investigated the situation of both the EUR/VND exchange rate and the value of Vietnamese agricultural main products exported to the EU market from 2015 to 2019 by determining the stationary of both time series and came to the conclusion that the two time series of selected variables are not stationary at the level but becomes stationary at the first difference It signifies that two variables have been integrated in the same order Second, the Johansen Cointergration test indicates that there is only one cointegrating equation among variables, indicating that there exists a long-term relationship between EUR/VND exchange rate and the value of Vietnamese agricultural main products exported to the EU market Third, the author used the VAR and VEC models to analyze the relationship between all variables in the short and long run The results of the two models demonstrate that: In the long term, a negative association between the two variables has been discovered, supporting the null hypothesis of the research In contrast, the short-run relationship test rejects the null hypothesis when it indicates that the EUR/VND exchange rate provides significant support to the value of Vietnamese agricultural major items exported to the EU market 52 Fourth, in terms of causal link, the Granger causality test investigated a one-way causation from the EUR/VND exchange rate to the value of Vietnamese agricultural principal items exported to the EU market but not vice versa 4.2 Some recommendations to improve Vietnamese agricultural products export to the EU market and enhance competitiveness of Vietnamese agricultural industry 4.2.1 For the government To begin, regarding the export orientation of agricultural products Vietnam has identified a group of products with strengths of Vietnam, from which to focus on promoting exports to the EU, including: coffee, rice, pepper, vegetables, rubber To promote the export of these agricultural products to the EU market, we need to develop organic agricultural products, clean agricultural products, and need to increase processing to create added value for processed agricultural products variable Therefore, it is necessary to continue promoting the restructuring of the agricultural sector in the direction of developing commodity agricultural production for export governments must improve support for agricultural firms and farmers producing agricultural products such as coffee, rice, and rubber, by constructing infrastructure, creating quality human resources, and attracting investment capital This strategy seeks to prevent disadvantages when prices, supply, and the currency rate fluctuate Farmers today primarily require new modern technology to apply to farming, which puts significant pressure on prices The Government needs to continue to perfect the land policy in the direction of encouraging the accumulation of land for large-scale production In which, perfecting regulations on supporting enterprises to access land to organize the production and processing of agricultural products for export, especially investment projects in deep processing of products, continuous production clusters - preliminary processing preservation - processing of agricultural products Second, the EUR/VND exchange rate has a negative impact on Vietnamese agricultural exports to the EU market As a result, governments must improve the quality of market 53 forecasting and assessment; closely monitor the situation in the EU market; and identify and capitalize on opportunities in other potential markets in order to reduce dependence and raise export turnover Especially in the context of continually altering economic conditions, the EUR/VND exchange rate frequently changes unexpectedly As a result, accessing and comprehending these shifts will transform dangers into opportunities for enterprises and farmers to "break through." Finally, one of the research findings indicates that, in the short run, an increase in the EUR/VND exchange rate will benefit Vietnamese agricultural products export to the EU market; thus, the Government needs to have policies to support businesses and farmers in terms of trade information through the development of a market information system, trade promotion, strengthening of market analysis and forecasting the exchange rate, and policies in different short periods Create favorable conditions for enterprises to organize trade promotion and market development activities, support Vietnamese enterprises to directly participate in production and distribution networks abroad Furthermore, by taking the initiative to write and execute international rules, negotiate contracts with partners, and readily take advantage of conducting business in local markets, Vietnam's commercial legal system will provide favorable conditions for the process of global economic integration After the law is implemented, businesses will require government assistance and support in implementing international quality standard systems and social standards, particularly in the agriculture industry To satisfy the expanding requirements of the international market, relevant stages and sectors must integrate the program of knowledge dissemination and awareness raising with the implementation and registration of certifications for firms 4.2.2 For domestic enterprises Firstly, Vietnamese agricultural enterprises must select an appropriate method for actively entering the EU market's distribution channels, specifically: I establishing close 54 relationships with distribution centers and large supermarkets in the market for direct export, minimizing the situation of exporting through intermediaries (ii) Forming joint ventures through the use of well-known brand licenses and trademarks In addition to direct export or export joint ventures, Vietnamese agricultural firms must investigate direct investment to improve market penetration Second, with the EUR/VND exchange rate having a negative long-run impact and a positive short-run impact, Vietnamese firms and farmers must have flexible production and planning plans in order to utilize or reduce the impact of the EUR/VND exchange rate at various phases Third, collaborate with domestic agricultural firms that produce and export agricultural products Small and medium-sized businesses must collaborate to lessen internal competitive pressures within industries and boost worldwide competitiveness In addition to the solutions listed above, businesses and farmers must focus on organizing production and reducing production costs; researching and applying advanced production technologies and management software to improve labor productivity, mobility, and competitiveness; capitalizing on opportunities to attract orders; effectively maintaining and exploiting traditional customers and developing new ones; contributing to the stabilization of production and ensuring job security Furthermore, firms should focus on developing strategic relationships with clients who are significant retailers and importers around the world; participating in their link chains to stabilize orders and consumers; and gaining access to their management and business knowledge 4.3 Limitations of the research and future research development In conclusion, the novel discoveries of this study help to improve time series data investigations both in practical and theoretical In terms of value in theoretical, this study used the Cointegration test, the Granger causality test, the VEC model, and the VAR model to provide additional evidence validating the existence of a relationship between 55 the EUR/VND exchange rate and the export of Vietnamese agricultural main products to the EU market In terms of practical implications, the findings of this finding can assist the Vietnam Government, agricultural enterprises, and farmers in better understanding the transmission mechanism of the influence of EUR/VND exchange rate on Vietnamese agricultural main product exports in order to develop appropriate strategies Firstly, purposeful sampling limited the scope of the study, resulting in a relative and generalized outcome In other words, in addition to the findings of this study, the Vietnamese government and exporting companies must conduct research on a variety of other specific aspects of exports, such as infrastructure development, transportation in Vietnam, the impact of domestic demand, competition from other exporters, and so on To improve generality, future research should employ a larger sample size, broaden the scope of research to many more nations and agreements, and extend the study term to show a clear shift in export value, allowing for more authentic conclusions Secondly, the lack of independent variables leads to subjective assessment on the fluctuation of Vietnamese agricultural main product exports In addition, the selected time period in this research may have been too trivial to capture the true influence of EUR/VND exchange rate to Vietnamese agricultural main product exports to EU market Thus, future investigation can relies on these limitation to expand the study for a better understanding or finding new insights Finally, the study focuses on exporting agricultural primary items (such as rice, rubber, coffee, vegetables, tea, and pepper) in order to propose exports for the entire industry Including more goods in the survey will provide a more objective and accurate assessment of Vietnamese agricultural exports in general 56 REFERENCES Asteriou (2016) Exchange rate volatility and international trade: International evidence from the MINT countries Economuc Modelling, 133-140 Baffes (2003) The transmission of world commodity prices to domestic markets under policy reforms in developing countries Policy Reform, 159-180 Buguk (2003) The Impact of exchange rate variability on agricultural exports of developing countries: The case of Turkey Journal of International Food & Agribusiness Marketing, 83-105 Busse (2012) ) Price formation in the German biodiesel supply chain: a Markovswitching vector error-correction modeling approach Agricultural Economics, 545-560 Campiche (2007) Examining the evolving correspondence between petroleum prices and agricultural commodity prices The American Agricultural Economics Association Annual Meeting Portland Chen (2010) Can exchange rates forecast commodity prices? 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Situation of Vietnam’s agricultural products export 32 3.1.1 Situation of Vietnam’s agricultural products export in the period 2015-2019 32 3.1.2 Situation of Vietnam’s agricultural... 33 Figure 3.2 Vietnam''s coffee export to EU market in 2015-2019 34 Figure 3.3 Vietnam''s pepper export to EU market in 2015-2019 35 Figure 3.4 Vietnam''s vegetables export to... 2015-2019 36 Figure 3.5 Vietnam''s rice export to EU market in 2015-2019 37 Figure 3.6 Vietnam''s tea export to EU market in 2015-2019 38 Figure 3.7 Vietnam''s rubber export to EU market