The Asymmetric Effects of Geopolitical Risks on Vietnam’s Exports

This study is devoted to investigating the asymmetric effects of geopolitical risks (GPRs) on Vietnam’ exports during the period from January 2010 to December 2024. Using a nonlinear Autoregressive Distributed Lag (NARDL) bounds testing model, the study documented that in the short-run, GPRs have asymmetric effects on Vietnam’s exports. Specifically, negative changes in GPRs have a significantly negative influence on the exports while positive changes in the GPRs have no significant effects on exports. In the long-run, the same effects of GPRs on exports are also found from the NARDL model. Specifically, negative changes in GPRs have a significantly adverse effect on exports, while positive changes in GPRs have no significant influence on exports in the long-run. Moreover, the empirical findings reveal that, in the long-run, the real exchange rate (RER) has a significantly positive impact on exports, suggesting that the depreciation of the VND (Vietnamese Dong) boosts Vietnam’s exports. Finally, the findings obtained from the error correction model show that 34.82 percent of the divergence from the long-run equilibrium caused by a shock in month n will be corrected and adjusted back toward equilibrium in month n + 1.