Next Article in Journal
Cash Use of the Taiwan Dollar: Is It Efficient?
Next Article in Special Issue
Determinants and Impacts of Financial Literacy in Cambodia and Viet Nam
Previous Article in Journal
Acknowledgement to Reviewers of Journal of Risk and Financial Management in 2018
Previous Article in Special Issue
Using Unconventional Wisdom to Re-Assess and Rebuild the BRICS
Article Menu

Export Article

Open AccessArticle
J. Risk Financial Manag. 2019, 12(1), 12; https://doi.org/10.3390/jrfm12010012

Exchange Rate Volatility and Disaggregated Manufacturing Exports: Evidence from an Emerging Country

1
Business and Economics Research Group, Ho Chi Minh City Open University, Ho Chi Minh City 722000, Vietnam
2
School of Business, Edith Cowan University, Joondalup, WA 6027, Australia
*
Author to whom correspondence should be addressed.
Received: 19 November 2018 / Revised: 21 December 2018 / Accepted: 4 January 2019 / Published: 9 January 2019
(This article belongs to the Collection Trends in Emerging Markets Finance, Institutions and Money)
Full-Text   |   PDF [1162 KB, uploaded 9 January 2019]   |  

Abstract

The link between export performance and exchange rate policy has been attracting attention from policymakers, academics, and practitioners for some time, particularly for emerging countries. It has been recently claimed that implementing a policy that devalues the currency in Vietnam is an important factor for enhancing its export performance. However, it is also argued that such a policy could result in the harmful consequence of exchange rate volatility. This study analyzes the link between exchange rate devaluation, volatility, and export performance. The analysis focuses on the manufacturing sector and 10 of its subsectors that were engaged in the export of goods between Vietnam and 26 key export partners during the 2000–2015 period. Potential factors that could affect this relationship, such as the global financial crisis, Vietnam’s participation in the World Trade Organization, or even the export partners’ geographic structures, are also accounted for in the model. The findings confirm that a strategy that depreciates Vietnam’s currency appears to enhance manufacturing exports in the short run, whereas the resulting exchange rate volatility has clear negative effects in the long run. The impact of exchange rate volatility on manufacturing subsectors depends on two factors, namely, (i) the type of export and (ii) the export destination. Policy implications emerging from these conclusions are presented. View Full-Text
Keywords: exchange rate volatility; export performance; disaggregated data; manufacturing sector; emerging country exchange rate volatility; export performance; disaggregated data; manufacturing sector; emerging country
Figures

Graphical abstract

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
SciFeed

Share & Cite This Article

MDPI and ACS Style

Vo, D.H.; Vo, A.T.; Zhang, Z. Exchange Rate Volatility and Disaggregated Manufacturing Exports: Evidence from an Emerging Country. J. Risk Financial Manag. 2019, 12, 12.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
J. Risk Financial Manag. EISSN 1911-8074 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top