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The relationship between Foreign Direct Investment, trade openness, exchange rate, and Gross Domestic Product per capita in Vietnam

100%

Nguyen A. T., Poczta-Wajda A.

Journal of Economics and Management

2024

vol. 46

189-212

Aim/purpose – This study explores the nexus between Foreign Direct Investment (FDI), trade openness, exchange rate, and Gross Domestic Product (GDP) per capita in Vietnam between 1986 and 2020. Design/methodology/approach – The Vector Error Correction Model (VECM) was used to evaluate the nexus between FDI, trade openness, exchange rate, and GDP per capita in Vietnam between 1986 and 2020. Moreover, the Johansen co-integration test examined the long-run relationship among these variables. Findings – Results address that GDP per capita, FDI, and trade openness may generate an appreciation of the Vietnamese currency in the short run. In the long run, we found that FDI inflows and trade openness support GDP per capita, but the depreciation of Vietnam Dong harms the economic growth of this country in the long run. The Johansen co-integration test confirmed a long-run association among GDP per capita, FDI inflows, trade openness, and exchange rate. Results also indicated a unidirectional causality running from GDP per capita and trade openness to FDI and exchange rate. In addition, a bidirectional causality ran from FDI to the exchange rate. Research implications/limitations – Policies were recommended to facilitate macroeconomic stability for Vietnam. First, fiscal and monetary policies should be carried out to achieve targets in macroeconomic stability, economic development, employment creation, and inflation control. Second, FDI inflows should continue to be encouraged since they accelerate economic growth. Still, FDI projects should concentrate on improving labor skills and technological progress and promoting sustainable development in crucial sectors such as agriculture, energy, and the environment. Third, fostering innovation in exports by shifting focus from raw materials and inputs exports towards processed and high-value-added commodities while also promoting exports from domestic enterprises to reduce reliance on exports from FDI enterprises. Lastly, improving flexible and active exchange rate regimes consistent with real conditions in both domestic and international markets is necessary to stabilize the exchange rate and foreign currency market in Vietnam. Originality/value/contribution – This paper contributes to the field by providing specific policy recommendations for Vietnam. These recommendations aim to stabilize the economy, attract FDI, renovate exports, and implement flexible and active exchange rate regimes.

Potential trade effects of tariff liberalization under the Transatlantic Trade and Investment Partnership (TTIP) for the EU agri-food sector

100%

Poczta-Wajda A., Sapa A.

Journal of Agribusiness and Rural Development

2017

vol. 44

issue 2

421-433

Celem artykułu było określenie potencjalnych efektów handlowych zawarcia Umowy o Transatlantyckim Partnerstwie Handlowym i Inwestycyjnym (TTIP) dla sektora rolno-żywnościowego w UE. Analiza ex post objęła charakterystykę obrotów produktów rolno-żywnościowych UE z USA w latach 2004–2014 na podstawie danych statystycznych z bazy Banku Światowego WITS. Ocena ex ante przeprowadzona została z wykorzystaniem modelu równowagi cząstkowej SMART. W efekcie zrealizowanych badań stwierdzono, że chociaż bilateralne relacje handlowe UE–USA w zakresie produktów rolno-żywnościowych mają względnie niewielkie znaczenie, są istotne na poziomie poszczególnych branż. Umowa TTIP, obejmująca redukcję barier taryfowych w handlu rolno-żywnościowym UE–USA, przyczynić się może do pobudzenia wzajemnych obrotów rolno-żywnościowych w większym stopniu dla USA. Utworzenie strefy wolnego handlu wywoła głównie efekt kreacji, przy czym będzie on asymetryczny – skupiony w kilku grupach produktów.

The aim of this article is to determine the potential trade effects of Transatlantic Trade and Investment Partnership (TTIP) for the EU agri-food sector. The ex post analysis covered the characteristics of agri-food trade between the EU and the US in the years 2004–2014 on the basis of statistical data from the database of the World Bank WITS. The ex ante evaluation was carried out using SMART – a partial equilibrium model. The results of the study indicate that although bilateral agri-food trade relations of the EU–US have relatively little importance, but it is significant at the individual industries level. TTIP agreement, which includes the reduction of tariff barriers to agri-food trade between the EU and the US, will contribute to boosting bilateral agri-food trade to a greater extent for the US. The creation of a free trade produces mostly creation effect, whereby it will be asymmetric – concentrated in a few product groups.

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1 Journal of Agribusiness and Rural Development

1 Journal of Economics and Management

2 Poczta-Wajda A.

1 Nguyen A. T.

1 Sapa A.

1 2024

1 2017

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The relationship between Foreign Direct Investment, trade openness, exchange rate, and Gross Domestic Product per capita in Vietnam

Potential trade effects of tariff liberalization under the Transatlantic Trade and Investment Partnership (TTIP) for the EU agri-food sector