Impacts of the COVID-19 pandemic on international trade in developing countries: evidence from Vietnam

PurposeThe coronavirus disease (COVID-19) pandemic has been negatively affecting international trade between countries; however, there is a lack of empirical studies on developing countries such as Vietnam. This article aims to investigate how the COVID-19 cases and related deaths and policy respons...

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Bibliographic Details
Published in:International journal of emerging markets 2024-05, Vol.19 (5), p.1113-1134
Main Authors: Dong, Chung Van, Truong, Hoan Quang
Format: Article
Language:English
Subjects:
Contact tracing
Coronaviruses
COVID-19
Debt cancellation
Destinations
Developing countries
Exports
First year
Free trade
Government
Health care
International trade
Investments
LDCs
Pandemics
Short term
Side effects
Supply chains
Trade agreements
Trading
Vaccines
Value
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Summary:PurposeThe coronavirus disease (COVID-19) pandemic has been negatively affecting international trade between countries; however, there is a lack of empirical studies on developing countries such as Vietnam. This article aims to investigate how the COVID-19 cases and related deaths and policy response by Vietnam and trading partners to the pandemic affect Vietnam's export activities.Design/methodology/approachThe authors use the monthly trade data from the General Department of Vietnam Customs and employ the Poisson pseudo-maximum-likelihood (PPML) estimator to empirically investigate the effects of COVID-19 and policy response to the pandemic on Vietnam's exports at aggregate and sectoral levels over a 33-month period.FindingsIn the first year of the pandemic (January–December 2020) as well as the whole study period (January 2019–September 2021), trading partners' COVID-19 burden adversely affected Vietnam's aggregate exports, and the effect of COVID-19 deaths is significantly larger than that of COVID-19 cases. In the first year of the pandemic, estimates show a negative effect of Vietnam's COVID-19 cases on its exports, while no evidence reveals the impact of Vietnam's COVID-19 deaths. However, during the entire study period, there are remarkable adverse effects of Vietnam's COVID-19 deaths on its exports. The effect of the COVID-19 burden in Vietnam and in its trading partners differs significantly across major subsectors. In the first year, there is a positive role of government response to the pandemic by Vietnam and its trading partners in Vietnam's aggregate exports, while in the whole study period, only a positive effect of Vietnam's government response is found. Economic support and free trade agreements (FTAs) have a positive effect on Vietnam's exports. In the first year of the pandemic, Vietnam's export losses due to COVID-19 outweighed its export gains from the pandemic. However, Vietnam's exports have significantly improved over the nine months of 2021.Research limitations/implicationsEfforts should aim to reduce the number of COVID-19 deaths rather than focus on reducing the number of COVID-19 cases. The application of stringency measures by both exporters and importers should be minimized, or at least those measures need to be combined with health methods, such as testing policy and contact tracing, short-term investment in healthcare and especially investments in vaccines. In addition, economic support, particularly debt relief, needs to b
ISSN:1746-8809
1746-8817
DOI:10.1108/IJOEM-09-2021-1395