Exchange Rate Volatility, Global Economic Policy Uncertainty, Trade Policy Uncertainty And Exporting Firms Performance In Vietnam: The Role Of Financial Constraints

Abstract

This thesis presents a detailed investigation into the effects of exchange rate volatility, uncertainties in global economic policy and trade policy, on the performance of exporting firms in Vietnam, with a specific focus on the moderating role of financial constraints. Based on a comprehensive dataset encompassing 500 firm-year observations from 2012 to 2022, the study employs a descriptive and panel regression framework using the Generalized Method of Moments (GMM) analyses to unravel the complex interplay between these variables. After employing interaction terms between Financial Constraint and Exchange Rate Volatility, Global Economic Policy Uncertainty, and Trade Policy Uncertainty, the empirical results reveal that financial constraints play a significant moderating role in how Vietnamese exporting firms are affected by exchange rate volatility, global economic policy uncertainty, and trade policy uncertainty. In particular, firms with better access to credit have been proved to be less negatively impacted by volatile exchange rate, whereas firms with higher interest coverage ratios are more vulnerable to these economic uncertainties. This study adds to the current body of knowledge by providing empirical evidence from an emerging market context, thereby enriching the understanding of how financial constraints can modulate the impact of various economic uncertainties on firm performance. The findings from this study are expected to offer valuable insights for policymakers and business leaders in Vietnam, aiding in the formulation of strategies to enhance exporting firms' durability and efficiency in in the midst of global economic challenges. This research not only adds to the academic discourse in international business and finance but also provides practical implications for businesses operating in dynamic and uncertain economic environments