The Impact of International Trade on Economic Growth in Vietnam 1990 - 2015

Abstract

The study examines the impact of exports, imports, gross capital formation, and exchange rate on the economic growth of Vietnam. The empirical analysis is conducted by using time series data from 1990-2015. The study employed regression analysis as the method of analysis using cointegration and vector error correction techniques (VECM) to find the long-run relationship between growth rate of the gross domestic product, exports, imports, gross capital formation, and exchange rate. The estimated results show that there is a long-run equilibrium relationship among dependent variables and independent variables. The results also indicate that the import and gross capital formation has a positive and significant influence on the economy of Vietnam, the exchange rate has positive and insignificant on economic growth. Meanwhile, import has a negative impact on economic growth. It concludes that international trade can play a major role in boosting Vietnam's economic growth.

Keywords: Exports, imports, gross capital formation, exchange rate, and economic growth