Journal of International Economics and Management

Foreign bank penetration in Vietnam following Vietnam’s accession to the WTO: matching expectations with reality

Pham Thu Huong — 2022-11-30

Vietnam continuously liberalizes the financial market as a requirement for its accession to the World Trade Organization in 2007. This paper discusses the foreign investors’ expectation and their experience when penetrating into Vietnam’s market. The role of the foreign entrants is also assessed. By synthesizing and analyzing relevant research and reports, several important insights are discovered. Firstly, the presence of foreign investors and banks improves market competition, efficiency, and stability. Wholly and partly foreign-owned banks provide the spillover effects in management quality, in the introduction of world standard banking products and services, and in the application of information technology. Secondly, by looking into the foreign owned banks, it is found that the banks’ foreign investors are not likely to play an influential role in managing the banks they invested in. The motive of the investors to control the invested companies leads to their decision of holdings withdrawing.

Does proximity matter? The effect of financial sector development on economic growth in the EAC and SADC regional blocs

Samwel Sanga Alananga — 2022-11-30

This study examines the finance-growth nexus among countries in the Southern African Development Community and East Africa Community regional blocs. We aim to see if small economies can rely on expansionary monetary policies to stimulate economic growth given the illusive nature of such policies. The panel error correction model is applied to analyze the aggregated data, which were obtained from the World Development Indicators and the Comité Européen d'Etudes des Polyphosphates. The results indicate that proximity to trading giants jeopardizes the freedom to use monetary expansionary policies among relatively small countries. If such policies are adopted, it will be a significant impact on countries located in regions where trading powers are evenly distributed.

Extended environmental Kuznets curve in Asia-Pacific countries: an empirical analysis

Nguyen Binh Duong — 2022-11-30

The effects of climate change are being recognized in all regions of the world and they are predicted to increase in the coming decades. This paper aims to study the impacts of economic growth, energy use, and trade liberalization on CO₂emissions in Asia-Pacific countries. By using panel data to build an Environmental Kuznet Curve (EKC), the empirical result shows that the EKC of Asia-Pacific countries has N-shape. Besides, the energy use is one of the factors that worsen the environment. Finally, trade liberalization is an important factor that improves environmental quality in the region.

Firm innovation strategies and integration into the global value chains: how does the local business environment matter?

Le Thi Ngoc Bich — 2022-11-30

This study aims to unravel how different innovation strategies affect firms’ modes of integration into the global value chains. By applying the self-selection hypothesis and utilizing longitudinal data of firms in Vietnam on 27,664 observations from 2012 to 2018, we find that innovation strategies affect the probability and modes of integration into the global value chains. While firms that prioritize product innovation and research and development are more likely to export, those that focus on process improvement tend to sell more to foreign direct investment buyers. These relationships are influenced by the quality of the local business environment. The improved quality of the local business environment enhances the positive effects of these innovation strategies on firms’ integration into the GVCs. This enhancement effect is particularly important for small- and medium-sized firms. The findings suggest that to support firms in Vietnam to integrate into the GVCs, the quality of the local business environment must be improved and it could be done by enforcing public policies that are complementary to firms’ innovation policies.

Factors affecting organizational commitment: research at the Joint-stock Commercial Bank for Investment and Development of Vietnam (BIDV)

Nguyen Hong Quan — 2022-11-30

The study examines the impact of six internal factors on the organizational commitment of the employees at the Bank for Investment and Development of Vietnam (BIDV). The reliability analysis and exploratory factor analysis were adopted to analyze the collected data from 292 surveyed samples. The results show that six elements including current job, working condition, leadership, colleagues, payments and salaries, promotion and development positively relate to employees’ organizational commitment at BIDV. Based on this finding, the most important implication is the need of establishing a holistic working environment.

Interdependence of stock markets: evidence from Vietnam

Tran Thi Van Anh — 2022-11-30

The study investigates the effect of spillovers regionally and worldwide on Vietnam’s stock market. The vector error correction model (VECM) is used to analyze the collected data from Bloomberg. Data include eight comparable stock market indices, namely DJI, NKY, SHCOMP, SET, MXSG, PCOMP, FBMKLCI, and JCI. The empirical results show that the Vietnamese stock market is significantly linked to that of the other countries. During the periods of dramatic market fluctuation, the cross-border linkage between the VN-Index and comparable indices is the largest. The impact of the stock markets of small nearby countries such as Singapore and Malaysia on the Vietnamese stock market are greater than the other large ones including the United States, Japan and China. The findings of this study contribute to the literature on the interdependence and interaction of stock markets. The common economic integration, especially in showing that effect found in other studies, is meaningful in explaining the observed phenomenon.