THE EFFECT OF MACROECONOMIC VARIABLES ON THAILAND - LAOS BORDER TRADE

  • จตุรงค์ - บุนนาค คณะเศรษฐศาสตร์ มหาวิทยาลัยแม่โจ้
Keywords: Value of Thailand-Laos border trade, The macroeconomic variables

Abstract

The objective of this research is to study macroeconomic variables that affect the value of Thailand-Laos border trade. The macroeconomic variables are the Kip exchange rate per US dollar, exchange rate of Baht per US Dollar, interest rates for one year short-term loans of Bank of The Lao PDR , retail loan interest rate of good customers of the Bank of Thailand, Laos consumer price index, Thai Consumer Price Index of Thailand, respectively.

Using monthly statistical data between January 2007 and December 2018, two hypotheses were defined (i) each macroeconomic variable affecting the value of trade between the Thailand-Laos border with unequal sizes and ( ii) the change of the baht / US dollar exchange rate will have a greater impact on the value of Thailand-Laos border trade than other variables used in the study.

Appling Vector Autoregressive (VAR) model, this study also shows that if changes occur with each variable used in the study, it will affect the value of Thailand-Laos border trade not only in the same direction but also in the opposite direction with unequal sizes according to hypothesis 1. By sorting the variables that affect the value of Thailand-Laos border trade Descending is as follows Exchange rate Kip to US Dollar, Laos Consumer Index, Thai and Laos interest rates, Thai Consumer Index and the Baht / Dollar exchange rate which is not in line with hypothesis 2.

Downloads

Download data is not yet available.

References

Bank of Thailand. (2015). Guidelines for the development of financial services to support the special economic development policy.
Bank of the Lao PDR. (2019). The statistical report for Q1 2019. Retrieved from www.bol.gov.la
Division of Trade and Investment Cooperation. (2017). Statistics of border trade and border trade in Thailand 2015 - 2017. https://www.m-society.go.th/ewtadmin/ewt/mso_web/article_attach/19325/20679.pdf
Dwyer, G. P. (2015). The Johansen Tests for Cointegration. http://www.jerrydwyer.com/pdf/Clemson/Cointegration.pdf
Enders, W. (1948). Applied econometric time series. https://www.academia.edu/25270301/Applied_Econometrics_Time_Series_4th_edition
Financial Institution Development Fund. (2016). Annual Report 2016. from Bank of Thailand https://www.bot.or.th/Thai/FinancialInstitutionsDevelopmentFund/About_FIDF/DocLib_Report/ReportFIDF2559.pdf
Gutiérrez, C. E. C., Souza, R. C., & Guillén, O. T. d. C. (2007). Selection of Optimal Lag Length in Cointegrated VAR Models with Weak Form of Common Cyclical Features. Retrieved from Central Bank of Brazil: https://www.bcb.gov.br/pec/wps/ingl/wps139.pdf
Natakit Karnkiangkai. (2015). The Relations between ETRON Index and Economic Factors: VAR Model. Bangkok University, Bangkok University.
Pattarasuda Susaen. (2005). A COMPARISION OF MODEL SELECTION CRITERIA ON LINEAR REGRESSION WITH SMALL SAMPLE SIZE. Chulalongkorn University, Retrieved from cuir.car.chula.ac.th/bitstream/123456789/6719/1/Pattarasuda_Su.pdf
Royal Thailand Embassy Vietiane Laos PRD. (2010). 60-year Relationship Thailand - Laos. http://www.thaisavannakhet.com/vientiane/th/60years_thai-laos/
Toda, H. Y., & Phillips, P. C. B. (1994). Vector Autoregressions and Causality: A Theoretical Overview and Simulation Study.
Published
2020-06-30