RESEARCH IMPACTS OF MAJOR VARIABLES ON THE EXPORTS IN VIETNAM IN THE PERIOD OF 2013 – 2023

The research aims to investigate the impacts of major variables on the exports in Vietnam during the period of 20132023. This study will dive deep into the correlation and causation between the factors that affect exports, such as economic growth, foreign investment, exchange rates, and trade policies. By examining these variables, the research will provide valuable insights into the factors that drive the growth of exports in Vietnam, as well as the challenges that hinder its potential. The study will use various statistical and analytical tools to analyze the data and draw meaningful conclusions that can guide policymakers in their efforts to boost Vietnams exports and increase its competitiveness in the global market. Overall, this research will contribute to the understanding of the role of major variables in shaping Vietnams international trade and economic development.re

VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

BIG ASSIGNMENT

RESEARCH IMPACTS OF MAJOR VARIABLES ON THE EXPORTS IN

VIETNAM IN THE PERIOD OF 2013 – 2023

TRAN THI LINH GIANG

Hanoi – Year 2023

VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

BIG ASSIGNMENT

Research impacts of major variables on the exports in VN in the period

of 2013-2023

LECTURERS: TS Chu Dinh Toi, TS Than Van Thai

STUDENT: Tran Thi Linh Giang

Table of Contents

I INTRODUCTION 5

1 Background of the study 5

2 Statement of the problem 5

3 Purpose and significance of the study 5

4 Research questions and objectives 5

II LITERATURE REVIEW 5

1 Overview 5

2 Previous studies and findings related to the topic 6

2.1 Domestic research 6

2.2 Foreign studies 6

3 Gaps in the literature and the need for the proposed study 7

III METHODOLOGY 7

1 Theoretical basis 7

1.1 CPI ( Consumer price index ) 7

1.1.1 CPI concept: 7

1.1.2 “Basket of goods” to calculate Vietnam CPI 7

1.1.3 Formula for calculating CPI 8

1.1.4 Application of CPI in practice 8

1.2 M2 (Total Means of Payment) 8

1.3 FDI (Foreign Direct Investment) 9

1.4 EVFTA (Vietnam Trade Agreement – EU ) 9

1.4.1 What is an FTA? 9

1.4.2 Main content of Vietnam free trade agreement- EU (EVFTA) 9

2 Impacts of major variables on Viet Nam Exports 9

2.1 Impact of CPI on Exports 9

2.2 Impact of M2 on exports 10

2.3 Impact of disbursed FDI on exports 10

2.4 Impact of EVFTA on exports 11

3 Research model and research results 13

3.1 Regression model 13

3.2 Estimating the regression model 13

3.3 Accreditation 13

3.3.1 Perform t test with βi 13

3.3.2 The fit of the model is checked by the F 15

3.4 Conclusion after testing the model defects: 21

3.5 Analyze the relationship between dependent variables and economic variables 21

3.6 Conclusions drawn from the model 22

IV BUGET AND RESEARCH PROBLEM PROPOSAL 22

1 Buget 22

2 Research problem proposal 22

V REFERENCE 23

No Symbol Description

I INTRODUCTION

1 Background of the study

In the current era of global economic integration, in order to survive and develop, countries cannot withdraw but need to participate in exchanges with many countries in the world in economic activities foreign countries and Vietnam is no exception Taking part in the

country's historical milestones, Vietnam's import and export activities in general and exports,

in particular, have undergone drastic changes, becoming an important driving force for the growth of the economy

The period 2006 to now is the period of the extensive economic integration of Vietnam withthe important event that Vietnam became the 150th member of the WTO, the state has given orientations to exploit the relative advantages of Vietnam Nam combines integration

opportunities to make the most of export markets and develop new markets Vietnamese goods have now penetrated into many markets with high requirements for goods quality and food safety such as the EU, Japan, the US, Australia By 2020, there are 31 export markets with a turnover of over 1 billion USD, of which, 5 markets have a turnover of over 10 billion USD, and 8 markets are over 5 billion USD Exports make an important contribution to economic development, improving the balance of payments, stabilizing the macro-economy, stabilizing exchange rates, controlling inflation, creating spillover effects, promoting

production, creating jobs, and creating jobs income for millions of employees

2 Statement of the problem

In the development of the export market economy and the State's policies, macro variables have meaning and play an important role in many aspects, especially the close relationship with growth of the export market in Vietnam If the macro variables are stable, then it will create favorable conditions to maintain order and promote investment, production, and export.With the aim of providing an overview of the impact of macro variables on Vietnam's export activities, based on theoretical grounds and practical data to determine the level of influence

of these factors Factors as well as recommendations for measures to increase exports, I chose the topic: "Study on the impact of macro variables on the export situation in Vietnam in the period of 2013 - 2023" as the topic study

3 Purpose and significance of the study

Research the impact of macro variables on the export situation in Vietnam in 2013 - 2023, thereby assessing the impact of variables and proposing solutions for the state and businesses

4 Research questions and objectives

- Analyze the role of macro variables in affecting the export situation in Vietnam in the period

of 2013 - 2023

- Assess the impact of macro variables on the export situation in Vietnam in the period of

2013 - 2023

- Proposing possible solutions to increase the export situation in Vietnam in the future

The question for the topic is: Are macroeconomic factors with the export market really correlated?

II LITERATURE REVIEW

frameworks, ways of collecting, processing and synthesizing information, methods of

information analysis, and methods of information analysis information and research criteria system The study uses both qualitative and quantitative analysis methods The qualitative analysis focuses on clarifying the reality of macro variables affecting Vietnam's exports in theperiod 2013-2021 Quantitative analysis uses a multivariate regression model to assess the impact of factors on exports The third is to clarify the current situation of factors affecting Vietnam's exports The multivariable regression model also quantifies the impact of the following factors on exports: disbursed foreign direct investment (FDIDIS) and total means ofpayment (money supply M2), consumer price index (CPI), and the signing of the EVFTA Agreement.

2 Previous studies and findings related to the topic

[2] “Mối quan hệ giữa FDI, xuất khẩu và tăng trưởng kinh tế tại Việt Nam, Trung Quốc và

Ấn Độ giai đoạn 1986 – 2017” -Phan Kim Phuong, 2019 The study applies the method of

autoregressive distributional delay (ARDL Bounds) model to find out the correlation between the factors of foreign direct investment, export, and economic growth In addition, the

Granger causality test method is used in the study to determine the direction of the impact between the three variables mentioned above, and at the same time, the study uses time series data of the three FDI variables exports, economic growth in Vietnam, China, and India from

[4] “Phân tích các yếu tố tác động đến xuất khẩu nông sản của Việt Nam sang thị trường EU” - Do Thi Hoa Nha, Nguyen Thi Thu Ha, 2019 The paper uses an extended gravity

model and array data to analyze the factors affecting the export of agricultural products of Vietnam, a developing country, to the EU, a highly developed market, in the period of 2005 -

2016 The model estimation results show that the factors: GDP per capita, population,

institutional quality and WTO accession have a positive impact, while geographical distance and technology distance have the same effect has a negative impact on agricultural exports

[5] “Xuất khẩu Việt Nam sau khi tham gia các hiệp định thương mại tự do thế hệ mới - Một

số kiến nghị chính sách” – Nguyen Thi Tam, 2020 The study has provided the theoretical

basis and international experience on free trade agreements; The reality of Vietnam's exports after joining new-generation free trade agreements; Some policy recommendations to increaseVietnam's exports when participating in new-generation free trade agreements

macroeconomic variables of the Indian economy on Chinese exports and the impact of

selected macroeconomic variables of the Chinese economy on At the third level, policies are proposed on a model basis to improve exports from India Principal component regression analysis is used to prepare the economic model from selected independent macroeconomic seas

[7] Reis J, Forte R (2016), “The impact of industry characteristics on firms’ export intensity”, International Area Studies Review Based on a sample of Portuguese firms for the period 2008-2010 and using panel estimates, the paper shows that firm export intensity is positively affected by productivity (at the industrial and corporate level), endorses the idea that

companies and governments need to direct their policies towards increasing productivity in order to improve their competitiveness in foreign markets

[8] Farhana Rahman (2017), "Impact of Selected Macro-Economic Variables on the Export Performance of Bangladesh.” This paper investigates the long- and short-term dynamics between Bangladesh's export performance and the variables Macroeconomics are selected using different econometric tools Variables to be considered are Interest Rate, Inflation Rate, Amount of Money (M2), Exchange Rate, and Industry Quantum Index The monthly data was analyzed for the period from July 2011 to June 2016

[9] Morgan (2018), "The effect of export promotion on firm-level performance", American Economic Journal: Economic Policy The study answers two questions: Does export

promotion improve firm performance and do the benefits outweigh the costs? And it shows that export promotion increases sales, added value, employment, and added value per labor For small businesses, the sum of export promotion expenditures, subsidies, and tax

adjustments, the value added is nearly three times higher than the direct costs of export promotion

[10] Samson Kitonyi et al (2020), “The effect of the Macro-environment factors on the relationships between firm resources and export performance of small and medium scale manufacturing enterprises in Nairobi city county Kenya" This paper evaluates the influence

of macro-environmental factors on the relationship between enterprise resources and export performance of small and medium-sized manufacturing enterprises in Nairobi County, Kenya

3 Gaps in the literature and the need for the proposed study

In fact, there have been many papers studying the factors affecting the export of Vietnameseproducts, but there are few or no studies on how macro variables affect the situation

Vietnam's exports, although these macro variables play an important role in the import and export industry

The limitations of the study are: due to the limited research time, the study has not analyzed the export trends in depth and has not analyzed the far-reaching impacts of each factor in eachseparate aspect The study mainly uses qualitative methods and collects data, there is no specific survey

The CPI represents only a relative change because it is based on only one basket of goods representing all consumer goods

It is also the most commonly used indicator to measure price levels and changes in price levels (i.e inflation or deflation)

1.1.2 “Basket of goods” to calculate Vietnam CPI

In Vietnam, the CPI was first calculated and announced by the General Statistics Office in

1998 (previously the retail price index of goods and services) with the reference base selected

as 1995 After 2 times of addition and revision, the General Statistics Office has agreed to introduce product groups to calculate CPI in Vietnam and use 2009 as the base of comparison

1.1.3 Formula for calculating CPI

CPI is formed from the spending information of thousands of households nationwide Information was collected through interviews and spending diaries of selected subjects for research

Determine the price: Statistics the price of each item in the cart at each point in time

Select the base period as a basis for comparison and then calculate the CPI using the

I: CPI for the reporting period

Wi: 2009 fixed weights of commodity group i

P0i: Price of item i at base period

Pti: Price of item i at the reporting period

1.1.4 Application of CPI in practice

The CPI can measure inflation If the CPI rises, many will assume that the rate of inflation

is increasing In addition, CPI is also used by traders to predict future prices Or employersuse to calculate wages Or maybe the Government to determine the increase for socialprotection funds

The CPI will be used to measure the inflation rate of a country over a certain period of time.The fluctuating CPI will help you determine whether the rate of inflation is rising or falling

1.2 M2 (Total Means of Payment)

Total means of payment is a measure of the money supply in the economy The number ismeasured through the measurements M0, M1, M2… Depending on the level of development

of the financial market, the Central Bank of a country chooses how to measure M In practice,the choice of a measure of money will depend on how best to predict economic variables overwhich money has a great influence such as the inflation rate, the business cycle, and theinflation rate business…In Vietnam, the total means of payment usually uses the M2measurement, including: banknotes, demand deposits and term deposits at credit institutions,foreign bank branches of organizations , individuals who are residents of Vietnam in the non-financial institutional sector, the residential institutional sector, the not-for-profit institutionalsector serving households; valuable papers in Vietnam dong and foreign currencies issued bycredit institutions and foreign bank branches to organizations and individuals who areresidents of Vietnam.

Regulators think that controlling M2 is really important, as savings and time deposits atbanks are potential transaction amounts Moreover, between them and M1 there is often amutual transformation

1.3 FDI (Foreign Direct Investment)

FDI is a form of long-term investment by an individual or organization from one country to another by setting up factories and business establishments The aim is to achieve long-term interests and take control of this property

In fact, for the socio-economic development of Vietnam, FDI has a fairly clear role and has been confirmed in many fields According to recent statistics, the whole country has about 15,000 valid FDI projects with a total registered capital of 218.8 billion USD, with

implemented capital reaching 106 billion USD

1.4 EVFTA (Vietnam Trade Agreement – EU )

1.4.1 What is an FTA?

An FTA is a trade agreement between two or more countries Accordingly, the countries participating in the agreement will carry out a roadmap to reduce and eliminate tariff and non-tariff barriers, aiming to establish a free trade area This allows countries to take advantage of their comparative advantages, specializing and dividing labor to maximize the benefits of increased trade

This is essentially a form of international association, toward forming a unified market for goods and services However, the member countries In other words, the members of the FTA can maintain their own tariffs and other trade barriers to the world outside the agreement

1.4.2 Main content of Vietnam free trade agreement- EU (EVFTA)

EU - a large market with 28 member countries is one of the most important trading partners

of Vietnam Up to now, Vietnam has not had an FTA with countries in this region In fact, the

EU has also started negotiating an FTA with ASEAN since 2007 However, for various reasons, negotiations were stopped in 2009 This could also be a reason why the EU started seeking bilateral FTAs with individual countries in ASEAN The EU has completed FTA negotiations with Singapore, basically finished FTA negotiations with Vietnam, and is

negotiating with Thailand and Malaysia Currently, the two sides are negotiating a

Vietnam-EU Free Trade Agreement (VN-Vietnam-EU FTA), starting from June 2012

2 Impacts of major variables on Viet Nam Exports

2.1 Impact of CPI on Exports

In fact, CPI does not have a direct impact on a country's exports but is reflected in that country's inflation rate The higher inflation, the higher the price of goods, making it difficult for businesses to compete in the international arena.

In terms of inflation, this factor affects the domestic selling price, thereby putting pressure on the supply of goods for export, so it also has a certain influence on the export price Inflation also entails an adjustment in the exchange rate that affects export prices in the opposite direction Ignoring other factors, inflation affects exports mainly through price elasticity for different commodities Therefore, its impact on each commodity, and country, has almost no overlap For the same reason as mentioned above, studies on the impact of inflation on exports in Vietnam are still limited It can be said that this is a variable that has a rather complicated effect on export activities in Vietnam, which is still very little exploited

The relationship between inflation and exports remains largely unexplored in empirical studies However, as mentioned above, a decrease in exports can cause the domestic currency

to depreciate against foreign currencies leading to increased inflation risk Meanwhile, when export expansion brings abundant foreign currency, it reduces inflation

2.2 Impact of M2 on exports

To succeed in today's global market and win sales against foreign competitors, exporters must offer their customers attractive sales terms backed by suitable payment method Since the ultimate goal of every export sale is to be paid in full and on time, an appropriate paymentmethod must be chosen carefully to minimize payment risk while also meeting the needs of the client buyer The diversification of total means of payment will create favorable

conditions for enterprises in the export process to create competitive advantages

Currently, Vietnamese commercial banks mainly provide payment services according to three methods of money transfer, collection and payment by L/C This is the list of traditional international communication products of Vietnamese commercial banks These products are all products of payment media money transfer, collection or payment by L/C Most banks provide these international payment services Also with the development of banking

technology and the increasing demand of customers, many banks' reports appear more

specific payment products but basically all come from the above payment methods

In recent years, the structure of international payment transactions at Vietnamese

commercial banks has changed a lot, the proportion of money transfer transactions is

increasing In payment for export goods, the proportion of money transfer transactions

increased from 45% in 2013 to 65% in 2017 While the proportion of payments by L/C decreased from 26% in 2013 to 19% in 2017

Adapting to information technology and timely changes in accordance with market trends, making options on payment methods suitable to the characteristics of enterprises and export products also partly affect the export activities of goods chemical

2.1 Impact of disbursed FDI on exports

Foreign direct investment (FDI) has always been considered as one of the pillars of

Vietnam's industrialization, modernization and economic growth

After more than 25 years of renovation and implementation of the open-door policy,

increasing foreign investment attraction, the FDI sector has become an important part of Vietnam's economic development In addition to the significant additional capital for growth, job creation, technology transfer and management experience, FDI also makes a great

contribution to promoting the industrialized and modernized trade balance to bring Vietnam

to actively integrate into the international economy

In the dark color of the economy, in 2013, according to data published by the General Statistics Office, the registered FDI capital continued to increase with about 21.6 billion USD,the highest in the past 4 years, showing the role of FDI inflows The role, position and size of FDI inflows in the Vietnamese economy

And until 2021 - a year that can be said to be extremely volatile in the global economy, Despite the negative impact of the COVID-19 pandemic, international trade and foreign investment are two areas The brightest of Vietnam's economic picture in 2021 Regarding import and export, for the first time, Vietnam is among the top 20 countries in international trade in the world, maintaining a trade surplus for 6 consecutive years In trade surplus, the FDI sector makes a very important contribution Exports of FDI enterprises reached 247.5 billion USD, up 1.1% compared to 2020 and accounted for 73.6% of export turnover of the country The trade surplus of the FDI sector was 29.36 billion USD, making up for the trade deficit of domestic enterprises of 25.36 billion USD, thus creating a trade surplus of 4 billion USD It can be said that this is the brightest part of 2021.

Samsung is the largest export economic group in Vietnam (about 65-66 billion USD/year), the second largest export is textiles, although in September 2021 the situation is very

pessimistic when the production and supply chain broken due to social distancing, but finally exported $39 billion, which means that the business has had a drastic change of situation

It can be seen that from the period of 2013 up to now, FDI has played a very important role inVietnam's economy in general and the export market in particular showing positive signals amidst the gloomy color of the global economy in general

Source: Macroeconomic indicators: GDP growth, Export and FDI

2.2 Impact of EVFTA on exports

Considering a number of countries in the EU, which is currently one of the largest export markets of Vietnam since the EVFTA came into effect:

❖ Export to Germany

In 2020, Vietnam's exports to Germany accounted for about 2.4% of Vietnam's total export turnover to the world In contrast, for Germany, imports from Vietnam only account for about1% of the country's total import value This result shows that the German market still has a lot

of room for Vietnamese goods to boost exports in the near future, especially with

opportunities from the EVFTA

Specifically, since the EVFTA took effect on August 1, 2020, Vietnam's exports to

Germany have had some positive signs, although this is also the period when the COVID-19 epidemic broke out globally and affected the global economy seriously affect the production and export activities of Vietnam as well as the import demand of Germany In the first 5 months of implementing the EVFTA (August-12, 2020) when the epidemic was complicated

in the German market, Vietnam's exports to this market still reached 2.85 billion USD, up 6.1

% compared to the same period of the previous year Entering 2021, the epidemic became

more severe in Vietnam, but Vietnam's exports to Germany still achieved a growth of 10.6%,

to a record of $ 7.3 billion This result shows that the EVFTA Agreement has had positive effects to help limit the impact of the COVID-19 pandemic and promote the export of

Vietnamese goods to the German market

❖ Export to Spain

According to preliminary statistics of the General Department of Customs, Vietnam's goods exported to Spain in the first 6 months of 2021 grew by 12.3% over the same period in 2020, reaching more than 1.1 billion USD Among the main groups of goods exported to Spain by Vietnam in the first 6 months of this year, the group of phones and components ranked first interms of turnover, accounting for 27% of the total export turnover of goods goods to this market, reached 300.23 million USD, up 12.3% over the same period in 2020

⇨ Comments:

Trade between Vietnam and the EU still has certain improvements after one year since the EVFTA took effect Specifically, the study showed that Vietnam's export turnover to the EU market still increased by over 6% over the same period in 2020, reaching 39.7 billion USD This growth is thanks to the recovery of the EU economy in the second quarter of 2021 and the reduction of tariffs to help promote the export of Vietnamese products to the EU market

Vietnam's export turnover to the EU since the EVFTA took effect, 2019-2020

(Unit: billion USD)

Source: General Statistics Office, General Department of Customs