TY - JOUR

T1 - On the (a)symmetric effects of real exchange rate on trade flows

T2 - new evidence from US–Vietnam trade balance at the industry level

AU - Ho, Sy Hoa

AU - Nguyen, Trung Thanh

AU - To-The, Nguyen

N1 - Funding Information: We are grateful to an anonymous referee for her/his useful comments and suggestions. All errors or omissions are ours. Sy-Hoa Ho gratefully acknowledges financial support of the National Foundation for Science and Technology Development of Vietnam (NAFOSTED).

PY - 2023/3

Y1 - 2023/3

N2 - In this paper, we examined the asymmetric and symmetric effects of real exchange rate on bilateral trade balance between the United States and Vietnam at the industry level by employing both ARDL and NARDL models. We found that (i) only symmetric real exchange rate is statistically significant in explaining the total trade balance between the US and Vietnam in the long-run at the 10% statistical significant level; (ii) the effect at the industry level is mixed and dependent on product category; and (iii) the asymmetric effects are found in both short-run and long-run in 29 industries which account for 69% of the total industry. These findings suggest that Vietnam could import more commodities with a high import weight such as agricultural products, cork and wood, textile fiber, chemicals, and machinery products to reduce the US’s trade deficit.

AB - In this paper, we examined the asymmetric and symmetric effects of real exchange rate on bilateral trade balance between the United States and Vietnam at the industry level by employing both ARDL and NARDL models. We found that (i) only symmetric real exchange rate is statistically significant in explaining the total trade balance between the US and Vietnam in the long-run at the 10% statistical significant level; (ii) the effect at the industry level is mixed and dependent on product category; and (iii) the asymmetric effects are found in both short-run and long-run in 29 industries which account for 69% of the total industry. These findings suggest that Vietnam could import more commodities with a high import weight such as agricultural products, cork and wood, textile fiber, chemicals, and machinery products to reduce the US’s trade deficit.

KW - ARDL

KW - bilateral trade balance

KW - Exchange rate

KW - NARDL

UR - http://www.scopus.com/inward/record.url?scp=85101093571&partnerID=8YFLogxK

U2 - 10.1080/13547860.2021.1884346

DO - 10.1080/13547860.2021.1884346

M3 - Article

AN - SCOPUS:85101093571

VL - 28

SP - 949

EP - 971

JO - Journal of the Asia Pacific Economy

JF - Journal of the Asia Pacific Economy

SN - 1354-7860

IS - 3

ER -