(Luận văn thạc sĩ) the effect of exchange rate movements on vietnam’s trade balance

MASTER IN FINANCIAL MANAGEMENT THE EFFECT OF EXCHANGE RATE MOVEMENTS ON VIETNAM’S TRADE BALANCE n Graduate Student: Nguyen Thuy Trang Supervisor: Dr Nguyen Cam Nhung HANOI, 2021 ABSTRACT Thesis title: The effect of exchange rate movements on Vietnam’s trade balance Pages: 48 University: Vietnam National University, Hanoi Graduate School: International School Date: October, 2021 Degree: Master Graduate Student: Nguyen Thuy Trang Supervisor: Dr Nguyen Cam Nhung Key words: Exchange rate, trade balance, Vietnam, SPSS, effect This study clarifies the impact of the fluctuation of the VND/ USD exchange rate on trade balance in Vietnam by using SPSS tool Variables used in this research included exchange rate and trade balance Trade balance was drawn from import n and export value from the statistics of Vietnam Customs The time range for conducting data research was from 2000 to 2018, specifically data used are monthly statistics The nominal effective exchange rate data is taken from Vietnam customs from the first day of June 2000 to the first day of June 2018 for each The result of findings showed that the exchange rate appreciation had negative effect on the trade balance In details, revaluation in exchange rate had trend to make trade deficit; and devaluation in exchange rate had trend to make trade surplus ACKNOWLEDGEMENT I wish to express my sincere appreciation to my supervisor, Doctor Nguyen Cam Nhung, who has the substance of a genius: she convincingly guided and encouraged me to be professional and the right thing even when the road got tough Without her persistent help, the goal of this project would not have been realized The physical and technical contribution of ‘International School’ is truly appreciated Without their support, this project could not have reached its goal Thank you! Author Nguyen Thuy Trang n TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 Rationale and background 1.2 Research objectives 1.3 Scope of research 1.4 Research methods CHAPTER 2: LITERATURE REVIEW 2.1 Concepts of exchange rate 2.1.1 Exchange rate 2.1.2 Effect of exchange rate movements on import and export 2.1.3 VND/USD (Jan, 2000 – Jan, 2018) 11 2.2 Exchange rate policy in Vietnam 13 n 2.2.1 Exchange rate regime 13 2.2.2 Exchange rate policy administration 15 2.3 Trade balance 17 2.3.1 Definition of trade balance 17 2.3.2 Trade deficit and trade surplus 18 2.3.3 Importance of trade balance in economy 20 2.3.4 Effect of trade surplus and trade deficit on economic indicators 22 2.4 Factors impacting trade balance 25 2.5 Theorical framework of relationship between exchange rate and trade balance 27 2.5.1 J-curve theory 27 2.5.2 Import and export elasticity and Marshall-Lerner 29 2.6 Trade balance in Vietnam from 2000 to 2018 31 2.7 Previous studies 37 2.8 Research gaps and aims 40 2.9 Conceptual framework 41 CHAPTER 3: RESEARCH METHODOLOGY 42 3.1 Methodology 42 3.2 Data collection procedures 44 3.3 Data analysis procedures 44 3.4 Analytical process 45 3.5 Reliability and validity 46 CHAPTER 4: FINDINGS AND DISCUSSION 46 4.1 Data analysis of VND/USD 46 4.1.1 Correlation analysis of variables 46 4.1.2 Regression analysis 47 4.1.3 Result of regression model 49 4.1.4 Suitability test 50 n 4.1.5 Multicollinearity test 50 4.1.6 Self-correclation test 51 4.1.7 Calibration distribution test of residual 51 4.2 Data analysis of NEER 53 4.3 Discussion 57 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 60 5.1 Summary of the findings 60 5.2 The implication of the research 60 5.3 Limitations of the research 61 5.4 Recommendations 62 LIST OF ABBREVIATIONS VND: Viet Nam Dong USD: United States Dollar SPSS: Statistical Package for the Social Sciences IMF: International Monetary Fund EURO: European- American Unity and Rights Organization GDP: Great British Pound ARDL: Autoregressive Distributed Lag FDI: Foreign Direct Investment EX: Export EI: Import R2: R square F-Test: Fisher Test VIF: Variance Inflation Factor n JPY: Japanese Yen E: Exchange Rate GDP: Gross Domestic Product SBV: State Bank of Vietnam TB: Trade Balance VECM: Vector Error Correction Model CPI: Customer Price Index SVAR: Structural Vector Autoregressive VECM: Vector Error Correction Model VAR: Vector Autoregressive IRF: Impulse Response Function P-P: Probability LIST OF TABLES Table 3.1: Variables used in SPSS 43 Table 4.1 : Correlation analysis results 46 Table 4.2: Descriptive statistics 47 Table 4.3: the result of regression model 49 Table 4.4: Suitability of the model 40 Table 4.5: Analysis of variance 40 n i LIST OF FIGURES/ GRAPHS Graph 2.1: the effect of devaluation on price and volume of imports and exports 10 Graph 2.2: the effect of revaluation on price and volume of imports and exports 11 Figure 2.1: Exchange rate of VND/USD (1/1/2000- 1/1/2018)(Vietnam customs, 2019) 12 Figure 2.3: J curve effect 28 Figure 2.4: Trade balance of Vietnam from 2000 to 2018(Vietnam customs, 2019) 32 Figure 2.5: the conceptual framework of effect of exchange rate volatility on trade balance 42 n Figure 4.1: Frequency histogram of normalized quadrant 52 Figure 4.2: P-P plot of standardized regression residuals 53 Figure 4.3 The result of research model 53 ii CHAPTER 1: INTRODUCTION 1.1 Rationale and background Since the early 20th century (supplanting an earlier French term mundialisation), the term ‘globalisation’ has been appeared, developed its current meaning some time in the second half of the 20th century, and came into popular use in the 1990s The development of ‘globalisation’ has continuously affected almost every countries in modern economy Thereby in the context of globalisation and international economic integration, mechanisms and policies to regulate exchange rates are very important to directly affect the trade balance and macroeconomic stability in each country As a result, imbalance in the trade balance has become a favoured research topic within community of economists n Manyara (2017) concentrates on effects of exchange rates volatility on imports and exports in Kenya Volatility of exchange rates has both positive and negative impacts on trade balance; while exchange rate and trade balance have a positive correlation with each other in a long-run Osoro (2013) share a common opion with Manyara (2017) about the positive relationship between these two variables in Kenya in long term Positive relationship between exchange rate volatility and trade balance usually happens to developed countries because these countries have high volume and value in exports In terms of negative relationship, Clark (1973) explains that the volatility of exchange rates reduces international trade transactions and makes profit change Hooper and Kohlhagen (1978) states a greater risk for personal decision making posing by exchange rate Economic agents experience greater uncertainty with international trade when they cannot predict the value of foreign transaction; thus, it is difficult for firms to project their trade activities Chowdhurry (1993) also shows that the exchange rate volatility has a significant negative impact on exports for the G-7 countries The other study about the impact of exchange rates movements on trade of the G-7 countries done by Kroney; and Lastrapes (1993) states that the effect of exchange rate uncertainty on trade may vary across countries because of the differences in the level of competition, the use of hedging instruments, the economic scale of production and openness to international trade In addition, they found that export prices are much more impacted than export volumes One more time, Caporale and Dorodian (1994) affirm a significant negative relation between exchange rate uncertainty and trade flows through their study on the effect of exchange rate variability on US imports from Canada The result of a Vietnamese study of Vinh Nguyen and Duong Trinh (2019) about “the impact of exchange rate volatility on exports in Vietnam: n bounds testing approach” shows that export performance is influenced by the volatility of exchange rate in long run This is a negative relationship as a one percent increase in exchange rate volatility reduces export volume significantly about 0.11 percent Thuan Dong (2016) states that real depreciation in exchange rate significantly plays a positive role on improving the trade balance in both aggregate model and disaggregate models Income of domestic enterprises and its trading partners have negative and positive significant impacts on the trade balance respectively Passing many years of economic construction, Vietnam has had to face with the situation of trade deficit for a long time due to many different reasons (CEIC, 2019); and exchange rate is one of the important reasons influencing the change of trade balance In the case that the trade deficit is prolonged; it will lead to a shortage of foreign currency as a consequence, which leads to the insolvency of transactions outside the country and leaves serious The research has some implications as follows: This could be a meaningful research for others to make reference The reason is that theories and concepts of the research are written; so, readers will understand exchange rate and trade balance In addition, readers can also recognize how the exchange rate impacts trade balance For people who not know what exchange rate and trade balance, this research will help them to understand more things about these two items such as definition, types of exchange rate, relationship between exchange rate and trade balance, the factors impacting trade balance, and the impact of trade balance on other factors, etc In terms of practical significance, this research has contributed to make economic research works become more abundant In details, at the present, there is little research of the effect of exchange rate on trade balance in n Vietnam So, the thesis research “EFFECTS OF THE EXCHANGE RATE ON THE TRADE BALANCE IN VIETNAM” is really worth to become a research work in Vietnam In international scope, this research contributes to fulfill the collection of researching about the effect of exchange rate on trade balance In addition, among many researches on the effect of exchange rate on balance or researches about aspects of exchange rate and trade balance, no research used SPSS model for the analysis The use of SPSS model in this thesis research contributed to the richness of kinds of methodology in Vietnam as well as in the world 5.3 Limitations of the research In the personal opinion, this research has some limitation as follows: There are many aspects to mention about problems relating to exchange rate and trade balance However, due to word limited, this research cannot cover all aspects of these two items Certainly, important and main issue of 61 effect and trade balance are mentioned and analysed so that readers can perceive the knowledge of exchange rate and trade balance and their relationship with each other In terms of research methodology, the research used SPSS to analyse the effect of exchange rate on trade balance The result showed exchange rate had negative relationship with trade balance In particular, trade deficit is created when there is revaluation of exchange rate and trade surplus is created when there is devaluation of exchange rate However, if possible, it is better to test the effect of exchange rate on trade balance based on various variables In fact, this research took only two variables including exchange rate and trade balance into analysis So, taking inflation, FDI into analysis will make the research better 5.4 Recommendations In order to manage exchange rate better, there are some suggestions for n Vietnam to control and manage exchange rate The final aim is to make trade balance better Open market policy: By using the open market tool, the central bank buys and sells foreign exchange in the market to influence the supply and demand of foreign exchange and currency, thereby affecting the exchange rate (Phuc Nguyen, 2012) When the exchange rate is high, the central bank through the commercial banking system will launch reserve foreign currency to sell directly in the market on the purpose of creating an artificial supply of foreign exchange The exchange rate tends to stabilize again On the contrary, when the exchange rate is too low, the central bank buys foreign currency Exchange rate tends to rise again In Vietnam, open market policy can be improved through implementing synchronously and effectively a number of major contents in the process of renewing monetary policy (Chu Thanh Nga, 2017): 62 Firstly, it is necessary to diversify types of goods traded on the market In fact, the goods of the open market are still quite poor, mainly bank bills Means of transaction such as short-term bonds, securities issued by banks themselves, etc have not been traded on this market In addition, the volume of bank bills is too small compared to the size of the bank's capital Thus, the open market operations have not really had a great impact on the supply and demand of capital in the market Increasing the volume of goods traded is also an attractive force to attract more credit institutions to participate in the open market Secondly, the study to increase the number of sessions is necessary Currently, the number of trading sessions per day is 2, with maturities of 14 and 28 days Increasing frequency of open market transaction is essential to enhance the ability to meet market demand and increase the level of SBV n intervention in the market, which means an increase in exposure time of credit institutions with SBV Thanks to that, the SBV's support as the lender of the end will be better Thirdly, the State Bank completed the regulations on valuable papers depository Currently, although the bidding, evaluation and announcement are done online, the monitoring and depository of valuable papers by the State Bank is done completely manually This prolongs the time to deliver valuable papers between the State Bank and credit institutions when conducting open market transactions Therefore, the monitoring and custody of valuable papers by software will contribute to overcoming this limitation Fourth, a further increase in the number of members participating in the open market is necessary and important In fact, members participating in the open market over the past time have had an increase in number and diversity in types In the past, when the open market was mostly only state-owned 63 commercial banks, other banks were still standing out, now the Vietnamese open market has the presence of foreign bank branches In Vietnam, jointventure banks, joint-stock commercial banks, etc However, a large number of small joint stock commercial banks have not yet participated in the open market, due to their small size of capital and professional qualifications that have not met the bidding participation in this secondary money market Fifth, it is necessary to continue to modernize banking technology and payment system, create favorable conditions for the development of the secondary market for valuable papers The information technology system should be constantly upgraded to support the State Bank of Vietnam to promptly grasp market information (capital needs of the economy, liquidity of commercial banks, etc.) to make real and accurate decisions Rediscount interest rate policy: When the exchange rate fluctuates n strongly, the central bank adopts a change in the rediscount interest rate to adjust the supply and demand of foreign exchange, thereby affecting the exchange rate (Guillaumont and Jeanneney, 1998) If the market exchange rate is too high, the central bank raises the rediscount interest rate When the rediscount interest rate rises, interest rate in the market increases So, foreign capital flows into the country at aim to earn more interest in the case of other similar conditions The supply of foreign currency will increase, the demand for foreign currencies will decrease and the exchange rate tends to decrease In Vietnam, it is important to adjust the operating interest rate (mainly the refinancing interest rate and the rediscount interest rate) with the appropriate level and dosage for each period; apply ceiling deposit and lending interest rates of credit institutions to customers, gradually loosen; maintain the difference between interest rates of VND and USD, and encourage holding VND (Minh Khue, 2019) 64 However, Vietnam does not have an interbank interest rate corridor, and does not have a proper policy rate IMF’s recommendations from 2016 also affirmed that the State Bank needs to build an interest rate corridor to improve the effectiveness of the monetary policy when there is an interest rate corridor, it must be in a fully automatic direction To this, the central bank will regulate and announce a flexible ceiling / floor interest rate Interbank rates will run in that corridor It is necessary to continue to restructure other types of operating interest rates, continue to improve the interest rate management of credit institutions towards customers, towards liberalization a number of supporting solutions, such as improving the capacity of research, analysis, and forecasting; flexible exchange rate management; establishment of the monetary policy committee; developing markets (currency, derivatives, bonds); good communication n capacity policy should be given For credit institutions, it is recommended to improve governance capacity, consolidate the safety ratios, along with increasing participation in money market transactions, holding a reasonable amount of valuable papers ability to manage liquidity For the State Bank of Vietnam, it is proposed the development of the money and derivative market; promote solutions to develop the money market under the approved Vietnam Money Market Development Scheme In addition, is is also proposed that the Government, ministries and branches need to have the orientation specified in the price stabilization documents as the highest target, towards the only one Along with that is promoting solutions to develop financial and derivative markets Administrative intervention on international economic activities: The state can also influence the exchange rate through pure administrative policies such as import and export permits, quotas, foreign exchange policies, 65 and import and export tax policies However, these policies intervene violently on economic activities and are being phased out Relevant ministries, branches and agencies focus on studying strategic issues on international economic integration as a basis to advise and advise the Government in the process of making policies on economic integration such as the impact of joining new-generation FTAs, protectionist trends and the threat of trade war affecting our economy, shifting the focus of cooperation in regional frameworks and the world such as ASEAN, APEC, ASEM, WTO, the impact of the world economic and political situation on Vietnam's international economic integration It is important to promote research activities and policy advice on international integration and international economic integration, especially the economic and political situation in the world and the region that has impacts n on Vietnam, and development trends, new initiatives, policies and experiences from countries to effectively implement their commitments to integration It is recommended that studying and assessing the impact of tariff elimination according to the commitment roadmap in ASEAN on sensitive goods of our country such as cars, roads, gasoline, etc; forecasting the impact of the implementation of commitments in the CPTPP Agreement, the Vietnam - EU FTA to have appropriate policy recommendations when these agreements are ratified and put into effect Moreover, strengthen research, warnings and dissemination of technical measures of countries for businesses and related management agencies to actively deal with technical barriers; assume the prime responsibility for, and coordinate with concerned agencies in, studying and considering and formulating Vietnam's technical measures in accordance with Vietnam's 66 commitments on technical barriers to trade in the new generation FTAs are suggested Organize the effective implementation of international economic integration commitments: It is good way to promote the role of the National Committee on International Economic Cooperation in inter-agency coordination, further strengthen the connection, coordination, centralized administration and unity between economic integration strategic planning implementation of negotiation and implementation of integration commitments, urge and supervise ministries, branches and localities to effectively organize the implementation of international economic integration commitments, implement and exploit effectively FTAs that have already taken effect, review and complete the coordination mechanism to implement FTA commitments in n specific fields towards more practical and effective, ensure national interests and the serious implementation of FTAs, timely assess the arising problems and recommend solutions to remove, develop and strictly implement commitments in financial integration in tax; customs; insurance; securities; accounting - auditing and other services to implement the WTO Trade Facilitation Agreement; the National Single Window; the ASEAN Single Window and the Trade Facilitation Expand the market for Vietnamese goods and services: It is recommended to strengthen coordination of ministries, branches and agencies concerned to deal with outstanding issues in order to soon sign and ratify the Vietnam-EU FTA, coordinate and promote the completion of procedures for the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other signed agreements in order to soon put the agreements into effect for businesses and 67 people, develop a reasonable plan to complete the negotiation and signing of on-going FTAs, proactively research and evaluate the possibility of joining FTAs with new partners to seek market expansion opportunities for products; goods and services of Vietnam In 2020, despite being affected by the Covid-19 pandemic, Vietnam still achieved an impressive trade surplus of over $19 billion Following this feat, in 2021, the Industry and Trade industry aims to strive for a total export turnover to increase by 4-5% compared to 2020, the trade balance will continue to maintain the trade surplus However, Vietnam's exports in 2021 still depend on the prospects of the world economy, when the Covid-19 epidemic is controlled and a series of solutions on the export market The key in 2021 as well as beyond is to look directly at the existing limitations to promptly overcome and promote stronger and more sustainable commodity n exports Looking at exports in 2021, Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), said that in 2021, textile and garment exports will continue to face difficulties due to the post-pandemic period People's income is still very difficult It is expected that with the possibility that the epidemic scenario is better controlled in the world, Vietnam can export about 37-38 billion USD in 2021 overcome difficulties in 2021, 2022, even 2023 By the end of the third quarter of 2023, if Covid-19 is controlled, it will return to the normal state of 2019 FTAs, especially EVFTA, RCEP, CPTPP are being has a relatively good market structure," calculated Mr Giang It can be seen that, in the past time, the export work still has many problems and difficulties For example, the level of market diversification of some agricultural and aquatic products is not high Although many products have been reduced to 0% by foreign countries, some Vietnamese agricultural products are still not allowed to be imported into 68 some markets Although the proportion of export value of FDI sector has decreased in recent years, it still accounts for over 64% of the total export value of the country Because the production and exports of this block depend very strongly on regional and global supply chains, whenever there is a change in the supply chain, Vietnam's exports will be strongly affected In addition, under the impact of the rising trend of protectionism, trade conflicts and complicated developments of the Covid-19 epidemic worldwide, have changed the structure of global supply chains Countries, especially the US and the West, have strengthened trade remedies and trade protection measures According to Ms Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association, leather Footwear is one of the industries that make the best use of the EVFTA Agreement Exports of leather, shoes and bags will grow by n 15-20% in 2021 if the Covid-19 epidemic situation is well controlled “From the Covid-19 pandemic, it shows that the disruption of the supply chain has extremely serious effects on production, forcing the whole industry to rethink its strategy If you rely too much on imported raw materials, when there is a supply chain problem, businesses will be very passive The coming time is a very good opportunity for the whole industry and the Government to reestablish stronger policies for the development of supporting industries Vietnam must seize this opportunity to develop production of raw materials in Vietnam," said Ms Xuan Accordingly, the Ministry of Industry and Trade said, the key solution implemented to promote import and export in 2021 is to prioritize export promotion activities and export markets to recover soon after the pandemic; take full advantage of the FTAs that Vietnam has signed; capture market information and give early warning of arising problems affecting Vietnam's exports such as changes in importing countries' policies, 69 technical barriers, and risks in payment Simultaneously diversifying import and export markets, especially small and niche markets; diversify the structure of export products, improve the competitiveness of export products, develop the national brand of Vietnam n 70 BIBLIOGRAPHY n Gary, E (2014) Exchange rates The international organization for standardization (ISO) Lu, Y (2011) Exchange rates Economics 407, Yale January 2011 Available at http://www.econ.yale.edu/~ka265/teaching/UndergradFinance/Spr11/Sl ides/Lecture4-5%20Exhange%20Rates.pdf The economic times (2019) Definition of exchange rate Available at https://economictimes.indiatimes.com/definition/exchange-rate Blue Bull Capital (2018) Why is dollar called global currency Available at https://bluebullcap.com/vi/tin-cong-ty/tai-sao-dong-do-la-my-duoc-goila-loai-tien-te-toan-cau/ Arkolakis, C (2014) Exchange rates Economics 407, Yale January 2014 Romero,J (2012) Balance of trade JARGONALERT Region Focus Second/Third Quarter 2012 David, M, Roy, J (1996) Trade deficits: causes and consequences Research associate federal Reserve bank of Dallas and M.D Anderson Professor of economics university of Houston Nguyen Hoai (2019) Vietnam Trade deficit could balloon to $3 billion Available at https://e.vnexpress.net/news/business/industries/vietnamtrade-deficit-could-balloon-to-3-billion-3870043.html Thanh Hang (2018) What is trade deficit? The causes leading to trade deficit Available at https://vietnamfinance.vn/can-can-thuong-mai-lagi-nhung-nguyen-nhan-gay-tham-hut-can-can-thuong-mai20180504224208553.htm Justin, K (2019) Impact of trade deficits and surpluses on investors Available at https://www.thebalance.com/trade-deficits-surpluses-andimpacts-on-investors-1978872 Akrani, G (2011) What is trade? Meaning and nature- different types of trade Available at https://kalyan-city.blogspot.com/2011/03/what-istrade-meaning-and-nature.html Krugman, P (2006) International Economics Theory Policy Seventh Edition, Princeton University, Pearson Addison Wesley Many, H (2018) Which factors can influence a country’s balance of trade? Available at https://www.investopedia.com/ask/answers/041615/whichfactors-can-influence-countrys-balance-trade.asp Minh Uyen, T (2012) The factors affecting trade balance in Vietnam University of the Thai Chamber of Commerce EPrints UTCC http://eprints.utcc.ac.th/ 71 n Phan Minh Ngoc (2018) Tỷ giá biến động mạnh sao? Available at http://cafef.vn/ti-gia-bien-dong-manh-vi-sao-20180328080513968.chn Investing.com Available at https://vn.investing.com/currencies/usd-vndhistorical-data Vietnam Customs, (2019) Available at https://www.customs.gov.vn/Lists/ ThongKeHaiQuan/SoLieuThongKe.aspx?&Group=S%E1%BB%91%2 0li%E1%BB%87u%20th%E1%BB%91ng%20k%C3%AA&fbclid=Iw AR254gD2zseWFarWWutOllK0zyB4GiA3I_kxTkBknPOF2tgv0VZz_ q5tm8c Finance magazine (2016) Major developments in the trade balance period 2011-2015 Available at http://tapchitaichinh.vn/nghien-cuu-traodoi/nhung-dien-bien-chinh-trong-can-can-thuong-mai-giai-doan20112015-104168.html Osoro,K (2013) Kenya’s foreign trade balance: an empirical investigation, European economic journal Vol 19 Hooper,P and Kohlhagen,S (1978) The effect of exchange rate on uncertainty prices and volume of international trade Journal of international economics, 8(4) 483-551 Clark,P,B (1973) Uncertainty, exchange risk, and the level of international trade Western economic journal 11.302-313 Manayara,D (2017) Effects of exchange rates volatility on imports and exports in Kenya December 2017 Caporale, T and K Doroodian.(1994), “Exchange Rate Volatility and the Flow of International Trade”, Economics Letters, 46: 49-54 Chowdhury, T (1993), “Does Exchange Rate Volatility Depress Trade? Evidence form error correction models”, Review of Economics and Statistics, 75: 700-706 Vinh Nguyen Thi Thuy, Duong Trinh Thi Thuy (2019) The impact of exchange rate volatility on exports in Vietnam: a bounds testing approach J Risk Financial Manage 2019, 12, 6; doi:10.3390/jrfm12010006 www.mdpi.com/journal/jrfm Thuan Dong.Le (2016) The effect of exchange rate on trade balance in Vietnam: evidence from cointegration analysis Doctoral Course Student, Graduate School of International Development & Cooperation, Hiroshima University D153435@hiroshima-u.ac.jp Sevcan.G and Birgul.C, (2016) Marshall-lerner condition analysis:Turkey case Economics, management, and financial markets 11(1) 2016, pp 272-283, ISSN 1842-3191, Eissn 1938-212x 72 n Julian, T,K (2017) The standard model of trade and the Marshall-lerner condition Scientific Journal Warsaw University of Life Sciences – SGGW Problems of World Agriculture volume 17 (XXXII), number 4, 2017: 193–198 DOI: 10.22630/PRS.2017.17.4.95 Economics, Management, and Financial Markets 11(1) 2016, pp 272–283, ISSN 1842-3191, eISSN 1938-212X Guillaumont, P and Jeanneney,G (1998) Exchange rate policy in Vietnam and the “Asian crisis” Tran Phuc Nguyen (2012) Exchange rate policy and foreign exchange market in Vietnam , 1985-2009 Ohno, K (2003) Exchange rate management of Vietnam Issue Paper for Possible Future Research Hai An, Nguyen (2015) Exchange rate management in Vietnam for sustaining stable and long term economic growth Review of Business and Economics Studies Volume 3, Number 2, 2015 John,B (2016) Trade surpluses of countries trading with the United states real-world economics review, issue no 77 Amanda,A Chen,K and Papanyan,S ( 2017) The trade deficit: don’t fear the beast Economic analysis U.S economic watch March 2017 Ali,A (2016) Types of trade and aid to trade Available at https://www.slideshare.net/ashanrajpar/types-of-trade-and-aid-to-trade Vijayasri,G,V (2013) The importance of international trade in the world International Journal of Marketing, Financial Services & Management Research ISSN 2277- 3622 Vol.2, No 9, September (2013) Online available at www.indianresearchjournals.com Thanh Hang (2018).What is trade deficit? Advantages and disadvantages of trade deficit Cited 21st August 2018 https://vietnamfinance.vn/thamhut-thuong-mai-la-gi-uu-va-nhuoc-diem-cua-tham-hut-thuong-mai20180504224211841.htm Sean,R.(2019) What impact does the balance of trade have on GDP calculations Cited 4th May, 2019 https://www.investopedia.com/ask/answers/ 061515/what-impact-does-balance-trade-have-gdp-calculations.asp Quynh Anh (2018) What is revaluation? Cited 13rd August 2018 https://vietnamfinance.vn/tang-gia-dong-tien-la-gi20180504224211112.htm Kim, S (1996) How trade liberalization affects the political and economic performance of developing countries: the application of a two-stage game model Lynne Rienner Publishers Vol 20, No (SpringSummer 1996), pp 163-184 73 n Khim, K, S Lim, P, K Hussian,H (2003) Exchange rate and trade balance relationship: the experience of Asean countries Hall, M (2018) Which factors can influence a country’s balance of trade Cited 22nd Jun 2018 https://www.investopedia.com/ask/answers/041615/which-factors-caninfluence-countrys-balance-trade.asp Akorli and Eden (2017) The effects of exchange rates on trade balance in Ghana Kwame Nkrumah University of Science and Technology MPRA Paper No 88833, posted 14 Sep 2018 15:27 UTC Ahmad,Z,B (2002) The Effect of Exchange Rate on Bilateral Trade Balance: New Evidence from Malaysia and Thailand Journal of the East Asian Economic association 18 December 2002 Safet,K (2017) The effect of depreciation of the exchange rate on the tade balance of Albania REVIEW OF ECONOMIC PERSPECTIVES – NÁRODOHOSPODÁŘSKÝ OBZOR VOL 17, ISSUE 2, 2017, pp 141– 158, DOI: 10.1515/revecp-2017-0007 Ogutu,O,G (2014) Effects of the real exchange rate on the trade balance in Kenya International institute of social studies Tran Thi Ha (2019) Impacts of Exchange Rate on Vietnam-Japan Trade Balance: A Nonlinear Asymmetric Cointegration Approach Institute of World Economics and Politics, Vietnam Academy of Social Sciences MPRA Paper No 93286, posted 18 Apr 2019 08:16 UTC Nguyen Cam Nhung, Bui Tu Anh, Le Thi Hue, Nguyen Thi Cam Huyen (2018) The Impact of Exchange Rate Movements on Trade Balance between Vietnam and Japan: J Curve Effect Test Journal of science Published Jun 19, 2018 Vinh Nguyen Thị Thuy and Duong Trinh Thị Thuy.(2019) The impact of exchange rate volatility on exports in Vietnam: a bounds testing approach Journal of risk and financial management Sabine,V Nina,Z (2019) Preparing price studies- key methodological decisions Retrieved from https://www.sciencedirect.com/topics/economics-econometrics-andfinance/exchange-rate CEIC (2019) Vietnam Trade balance Retrieved from https://www.ceicdata.com/en /indicator/vietnam/trade-balance Pettinger, T (2019) Economic effect of a devaluation of the currency Economics Retrieved from https://www.economicshelp.org/macroeconomics/exchangerate/effectsdevaluation/ 74 Ogbonna, B.C (2018) Marshall-Lerner Condition and J Curve Phenomenon: Evidence from Nigeria IOSR Journal Of Humanities And Social Science (IOSR-JHSS) 12 (3) Bryman, A & Bell, E (2015) Business Research Methods (4th ed) Publication Date - May 2015 ISBN: 9780199668649 Christmann, P (2018) Notes on exchange rate regimes Darden Business publishing University of Virgina Stone, M Anderson, H Veyrune, R (2008) Exchange rate regimes Finance and development Retrieved from https://www.imf.org/external/pubs/ft/fandd/2008/03/pdf/basics.pdf Thanh Huyen Tran Thi (2018) Exchange rate policy and macroeconomic stability in Vietnam VNU Journal of science: Economics and business, 34 (2) n 75