TAILIEUCHUNG - Trade balance and exchange rate in Thailand and the implications for Vietnam: An application using instrumental variable and the heterogeneous panel cointegration methods

This study aims to investigate the link of trade balance and exchange rate for the case of Thailand in different aspects by initially attempting to examine what factors determine the trade balance in Thailand and then to test the long-run relationship between the exchange rate and Thailand’s trade balance. | Vo The Anh & Vo Hong Duc / Journal of Economic Development 23(1) 137-160 137 Trade Balance and Exchange Rate in Thailand & the Implications for Vietnam: An Application using Instrumental Variable and the Heterogeneous Panel Cointegration Methods VO THE ANH The Vietnam–Netherland Program, University of Economics HCMC – VO HONG DUC Open University of HCMC – ARTICLE INFO ABSTRACT Article history: This study aims to investigate the link of trade balance and exchange rate for the case of Thailand in different aspects by initially attempting to examine what factors determine the trade balance in Thailand and then to test the long-run relationship between the exchange rate and Thailand’s trade balance. The empirical findings indicate that the exchange rate and relative growth rate of income play central roles in explaining Thailand’s trade balance, and fiscal and monetary policies are beneficial in some cases. Additionally, panel fully modified ordinary least square (FMOLS) estimations illustrate that a devaluation of Thailand Baht offers a significantly positive improvement on its trade balance in the long run, especially for the groups of countries with upper middle and high income in America and Europe. Individual FMOLS regressions of Thailand’s trade balance and each of its 62 trading partners suggest that a devaluation of Thailand’s currency would stimulate Thailand’s trade performance with over 20 trading partners, but hurt its performance with the other 10 countries and be inconclusive to the others. Received: Feb. 6 2015 Received in revised form: Sep. 17 2015 Accepted: Dec. 30 2015 Keywords: Exchange rate, trade balance, currency depreciation, instrumental variable, fully modified ordinary least square. 138 Vo The Anh & Vo Hong Duc / Journal of Economic Development 23(1) 137-160 1. Introduction Exchange rate has always been one of the most attractive topics among academics, exporters, importers, investors, and .

• Kinh tế học
• Exchange rate
• Trade balance
• Currency depreciation
• Instrumental variable
• Fully modified ordinary least square
• Economic development
• Interest rate
• Stock return
• Vietnam stock market
• Interest rate on stock return
• Impact of exchange rate
• Real effective exchange rate
• Floating exchange rate policy
• Exchange rate volatility
• Vector autoregression
• Exchange policy
• Exchange rate regime
• Exchange control regime
• Moroccan economy
• Exchange regulation in Morocco
• International financial management
• Quản lý tài chính quốc tế
• Lecture International financial management
• Exchange rate determination
• Exchange rate equilibrium
• Exchange rates
• Lecture International Economics
• Bài giảng Kinh tế quốc tế
• Exchange rate systems
• Currency crises
• Official exchange rate
• Exchange stabilization fund
• International Finance
• Lecture International finance
• Tài chính quốc tế
• Bài giảng Tài chính quốc tế
• Exchange rate forecasting
• Sign restriction
• Monetary policy
• Fixed exchange rate
• Monetary setting
• ASEAN income gap
• Optimal exchange rate
• Foreign demand shock
• Income gap
• Panel SVAR
• Summary of PHD thesis
• The impact of CNY USD exchange rate
• Vietnamese macroeconomic factors
• Vietnamese economic objectives
• The exchange rate policy management
• The impact of USD
• Order imbalance
• NTD USD exchange rate
• Causality relation
• Taiwan exchange rate market
• Imbalance based trading strategies
• Firm level analysis
• Exchange rate exposure of Indian firms
• Exchange rate exposure
• Indian firms
• Stock returns
• Exchange rate regimes
• Financial crises
• Banking crises
• Logit model
• Exchange rate politics
• Time series
• Monetary policy on the exchange rate
• Sign restriction approaches
• RMB exchange rate expectations
• China's housing price fluctuations
• FAVAR model
• Degree of reversal intervention
• RMB exchange rate expectations explain
• Exchange rate on inflation and economic growth in Vietnam
• Inflation and economic growth in Vietnam
• Bilateral real exchange rate
• Consumer price index
• The two exogenous variables
• Oil price
• Exchange rate affect non oil GDP
• Oil rich country
• Non oil gross domestic product
• Fully modified ordinary smallest square approach
• Cointegration analysis
• Intra regional trade
• Panel gravity model approach
• Exports in COMESA
• Exchange rate volatility on exports
• Summary of Economics Ph d’s thesis
• Summary of Ph d’s thesis
• Exchange rate exposure research
• Market data
• Background on exchange rate exposure
• Models indicate
• Exchange rate movements
• Oil price shock
• Real exchange rate
• Exchange rate in Bangladesh
• Nexus between oil price shock
• Oil plays a crucial role
• International trade
• Econometric models
• Integrating properties
• Pegged exchange rate system
• Long run equilibrium
• Exchange Rate and Foreign Exchange Reserve
• Official website of Reserve Bank of India
• Software E – Views
• Cointegration Test and Unit Root Test
• Forward foreign exchange rate
• Spot foreign exchange rate
• Rational expectations
• Forward discount bias
• Forward rate biasedness
• Equilibrium exchange rate