STUDENT SCIENTIFIC RESEARCH

HAIPHONG, 22-04-2022

DE TE RM I NAN T S OF
RO W T H I N VIE T NAM
ECONOMIC G
LE THI THAO – 84911
RESEARCH GROUP:
PHD. HOANG CHI CUONG 5
INSTRUCTOR: NGUYEN MINH NGOC – 842
0
LE THI THANH TAM – 8473
 TABLE OF CONTENTS
Part I Part II Part III

1. Background of the topic 1. Vector Autoregression 1. Research results

2. Research question and model 2. Recommendation- Policy
method 2. Granger Causality test implication
3. Introduction to GDP 3. Constructed VAR models for
Vietnam’s GDP
4. Data source
1. URGENCY OF THE TOPIC
• started to launch the innovation in 1986.
• “Doi moi” – a board political move but an obvious economy one.
• the innovation program totally successes
• When the program was initiated, the economy was in decline, inflation was soaring, and many were
fleeing the country by whatever means possible.
• Less than a decade later, Vietnam had recorded five consecutive years of GDP growth at an average
annual rate of 8% have brought down inflation from triple to single digits and help attract foreign
capital from both public and private sources.
• Over the 3 decades, VN has got achievement in terms of the high economic growth with 7% in average
per year.

PART I
2. RESEARCH QUESTION
WHAT ARE DETERMINANTS OF ECONOMIC GROWTH IN VN?

AND RESEARCH METHODS

• Vector Autoregressive (VAR) and

• Granger Causality

(the time series date during 1990-2010)

PART I
3. INTRODUCTION TO GDP

DEFINITION OF GDP

GDP IS THE FINAL VALUE OF THE GOODS AND SERVICES

PRODUCED WITHIN THE GEOGRAPHIC BOUNDARIES OF A
COUNTRY DURING A SPECIFIED PERIOD OF TIME,
NORMALLY A YEAR. GDP GROWTH RATE IS AN
IMPORTANT INDICATOR OF THE ECONOMIC
PERFORMANCE OF A COUNTRY. (THE ECONOMIC TIMES)

PART I
FACTORS AFFECT TO GDP GROWTH
• IMPORT
IMPORTS PROMOTE ECONOMIC GROWTH

• EXPORT
THE EXPORTS BRING MONEY INTO THE COUNTRY, WHICH INCREASES THE EXPORTING NATION'S GDP

• POPULATION
WITH GROWTH IN POPULATION, AN ECONOMY IS ABLE TO PRODUCE INCREASINGLY MORE GOODS AND SERVICES

• FDI
FOREIGN DIRECT INVESTMENT IS AN IMPORTANT FACTOR OF ECONOMIC GROWTH

PART I
VECTOR AUTOREGRESSION MODEL (VAR MODEL)
DEFINITION
VECTOR AUTOREGRESSION (VAR) IS A STATISTICAL MODEL USED TO CAPTURE
THE RELATIONSHIP BETWEEN MULTIPLE QUANTITIES AS THEY CHANGE OVER
TIME. VAR IS A TYPE OF STOCHASTIC PROCESS MODEL. VAR MODELS GENERALIZE
THE SINGLE-VARIABLE (UNIVARIATE) AUTOREGRESSIVE MODEL BY ALLOWING FOR
MULTIVARIATE TIME SERIES. VAR MODELS ARE OFTEN USED IN ECONOMICS AND
THE NATURAL SCIENCES.

PART II
VECTOR AUTOREGRESSION MODEL (VAR MODEL)

XT,1 XT,2 AND XT,3 ARE THREE ECONOMIC VARIABLES

WT,1 WT,2 AND WT,3 ARE WHITE NOISES - CONTEMPORANEOUSLY CORRELATED

EXPECT E(WT,1) = 0 , E(WT,2) = 0 AND E(WT,3) = 0

PART II
GRANGER CAUSALITY
DEFINITION
THE GRANGER CAUSALITY TEST IS A STATISTICAL HYPOTHESIS TEST FOR
DETERMINING WHETHER ONE TIME SERIES IS USEFUL IN FORCAST ANOTHER, FIRST
PROPOSED IN 1969.
IT HELPS IN INVESTIGATING THE PATTERNS OF CORRELATION BY USING
EMPIRICAL DATASETS. IN FDI STUDY, GRANGER CAUSALITY IS USED TO CHECK
THE ROBUSTNESS OF RESULTS AND TO DETECT THE NATURE OF THE CAUSAL
RELATIONSHIP BETWEEN FDI AND GDP.

PART II
GRANGER CAUSALITY TEST
CAN BE PERFORMED BY
1. CHECKING STATISTICAL SIGNIFICANCE OF THE LAGGED DIFFERENCES OF
THE VARIABLES FOR EACH VECTOR
-> THIS IS A THE MEASURE OF SHORT-RUN CAUSALITY
2. EXAMINING THE STATISTICAL SIGNIFICANCE OF THE ERROR-CORRECTION
-> FOR THE VECTOR THAT THERE EXISTS A LONG-RUN RELATIONSHIP.

PART II
CONSTRUCTED VAR MODELS FOR VIETNAM’S GDP

LnGDPvnt = a.LnFDIt + b.LnPOPvnt + c.LnEXvnt + d.LnIMvnt + ԑit

In which:
● GDPvnt is the nominal GDP of Vietnam at year t (USD)
● FDIt is foreign direct investment implemented capital in Vietnam at year t (USD)
● POPvnt is the Vietnam’s population in year t (person)
● EXvnt is Vietnam’s export value at year t (USD)
● IMvnt is Vietnam’s import value at year t (USD)

PART II
DATA SOURCE
• A TIMESERIES DATA OF THE 5 MOST IMPORTANT DETERMINANTS OF
VIETNAM FROM 1990 TO 2020 INCLUDING GDP, IMPORT, EXPORT, POPULATION
AND FDI.
• DATA IS COLLECTED FROM RELIABLE SOURCES SUCH AS THE GENERAL
STATISTICS OFFICE OF VIETNAM (GSO), WTO CENTER, THE WORLD BANK
(WB) AND THE WORLD TRADE ORGANIZATION (WTO).

PART II
RESEARCH R E S U L T S

PART III
 THE ESTIMATED RESULTS OF VAR MODEL AND GRANGER CAUSALITY TEST USING STATA 11
SOFTWARE
Equation Excluded Chi2 Df P-value
LnGDPvnt LnPOPvnt 39.649 1 0.000*

LnGDPvnt LnFDIjt 3.3537 2 0.187 The coefficient of the

LnPOPvnt variable is
statistically significant
LnGDPvnt LnIMvnt 3.7838 2 0.151
-> Has effected to GDP
growth of Vietnam
LnGDPvnt LnEXvnt 2.2448 2 0.326

LnGDPvnt ALL 460.19 7 0.000

NOTE: * is statistically significant at the 1% level

PART III
 THE ESTIMATED RESULTS OF VAR MODEL AND GRANGER CAUSALITY TEST USING STATA 11
SOFTWARE
Equation Excluded Chi2 Df P-value

LnPOPvnt LnGDPvnt 39.649 2 0.003

LnPOPvnt LnFDIjt 3.3537 2 0.064 The coefficient of the

LnGDPvnt variable is
statistically significant
LnPOPvnt LnIMvnt 3.7838 2 0.000* -> Has effected to POP growth
of Vietnam
LnPOPvnt LnEXvnt 2.2448 2 0.116

LnPOPvnt ALL 460.19 8 0.000

NOTE: * is statistically significant at the 1% level

PART III
 CONCLUSION
Equation Excluded Chi2 Df P-value

LnGDPvnt LnPOPvnt 39.649 1 0.000*

LnPOPvnt LnGDPvnt 39.649 2 0.003*

NOTE: * is statistically significant at the 1% level

Bidirectional Relationship between GDP and POP growth of VN

PART III
 RECOMMENDATION-POLICY IMPLICATION

VIETNAM LACKS OF SKILLFUL LABOR FORCE

2/3 OF LABOR FORCE ARE NOT WELL TRAINED
-> VIETNAM SHOULD IMPROVE THE QUALITY OF THE LABOR FORCE SO THAT
THEY CAN CONTRIBUTE BETTER TO GDP GROWTH IN THE COMING TIMES.
THANK YOU FOR LISTENING