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THE IMPACT OF ECONOMIC FACTORS AND POLITICAL UNCERTAINTY ON

VIETNAM'S SEAFOOD EXPORTS TURNOVER

Conference Paper · October 2024

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 THE IMPACT OF ECONOMIC FACTORS AND POLITICAL UNCERTAINTY
ON VIETNAM’S SEAFOOD EXPORTS TURNOVER
Trung-Tuyen Danga, Minh-Hien Nguyena, Tien-Dat Nguyena, Hoang Son Vob,
Minh Quang Lea*, Ha-My Nguyena
a
VNU University of Economics and Business
b
94QP+G5Q, Ba Thang Hai, Ward 11, Vung Tau City, Ba Ria - Vung Tau
*Email: leminhquang.ueb@gmail.com

ABSTRACT
The increasing export dependency of producing regions presents significant socio-economic
risks, especially during supply or demand disruptions, with current geopolitical tensions posing
substantial challenges to the future of aquaculture production and value chains. Vietnam, a major
global seafood exporter potentially benefiting from the EVFTA, may face obstacles in this context.
To address these challenges, we analyzed the impact of economic factors and political uncertainty
on Vietnam’s aquaculture export turnover using the ARDL model, examining data from 23 EU
countries between 2004 and 2022. Our findings reveal significant long-term effects of GDP,
population, and inflation rates in importing countries, as well as a negative influence of political
uncertainty on export turnover. Political instability creates an uncertain environment discouraging
long-term commitments to international markets, while short-term exchange rate fluctuations can
hinder export performance. These results underscore the importance of economic growth,
demographic changes, inflation dynamics, and political stability in driving demand for Vietnamese
seafood, suggesting a focus on strengthening economic ties, managing inflation, and fostering
stable political environments to optimize export performance.
Keyword: ARDL; aquaculture export; political uncertainty

1. INTRODUCTION
Fishery plays an indispensable role in the ecosystem and human society all over the world.
The figures for seafood product consumption among the average person are rising, at 20.2 kg per
person, which doubles the figures for that of 50 years ago (FAO, 2024). In 2020, seafood
production from aquaculture reached a record of 214 million tons, which valued $424 billion. This
reveals a rise in the demand for seafood products, especially in Asian countries, where large
populations and rapid economic developments are driving this trend. Seafood exports not only
contribute to the economic developments of many countries, but also improve the life quality of
their residents, especially in developing countries (World Bank, 2018; FAO, 2024).
In Vietnam, the fishery sector is one of the key export industries, having a vital role to play
in the nation’s GDP, making Vietnam one of the world’s largest seafood exporters (VASEP, 2023).
As Vietnam’s second-largest seafood supplier in Asia, trailing only China, the EU market is critical
to the country’s fisheries sector. This strategic position is further enhanced by the EVFTA, which
presents opportunities to expand exports and solidify Vietnam’s role in international seafood trade.
However, the benefits of such agreements can be undermined by non-tariff barriers and political
uncertainties that may arise from changing trade policies or geopolitical tensions (Feng, 2023;
Qiao, 2023). As such uncertainty acts as a hidden transaction cost that can inhibit trade flows, and

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can deter firms from entering foreign markets (Handley & Limão, 2017). Additionally, the
globalization of seafood trade has made the sector more vulnerable to systemic shocks, such as
those caused by political instability. The COVID-19 pandemic illustrated this vulnerability, as it
disrupted supply chains and reduced demand, highlighting the interconnectedness of global
seafood markets (Villasante et al., 2021; Crona et al., 2020). Political uncertainty can exacerbate
these disruptions by creating an environment where market dynamics are unpredictable, leading
to fluctuations in demand and supply that can adversely affect seafood exports (Stoll et al., 2021;
Asche et al., 2022).
Numerous studies have explored economics factors impacting Vietnam’s seafood export
turnover to international trade markets (Do et al., 2019; Nguyen et al., 2020; Viet et al., 2017;
Nguyen, 2014). Numerous studies have explored economic factors impacting Vietnam's seafood
export turnover to international trade markets (Do et al., 2019; Nguyen et al., 2020; Viet et al.,
2017; Nguyen, 2014). Additionally, recent research has shown that trade policy uncertainty can
discourage exports, imports, and firms' entry into foreign markets (Handley, 2014; Handley and
Limão, 2017; Imbruno, 2018; Handley and Limão, 2015). While existing research has explored
the relationship between policy uncertainty and trade flows, the question of whether a country's
exports are influenced by the political uncertainty of its corresponding importing countries remains
under-studied. This gap in research is particularly relevant given recent geopolitical events. The
ongoing Russia-Ukraine conflict has increased instability in the EU market, a significant
destination for Vietnamese seafood exports. This instability poses challenges for Vietnamese
export companies, which often lack the capacity to effectively manage trade disputes and navigate
complex international markets. In this turbulent environment, Vietnamese exporters find
themselves at a disadvantage, potentially impacting their ability to maintain or grow their market
share in the EU. Given these circumstances, there is a pressing need for more comprehensive and
holistic research on the factors affecting Vietnam's seafood exports to the EU market. Such
research should consider not only traditional economic factors but also the impact of political
uncertainty in importing countries in order to develop more effective export strategies and
optimize economic benefits from this market.
The existing literature provides a strong theoretical foundation for this study. Given the
significant impact of climate change and EU market uncertainty, this study seeks to predict and
identify factors affecting Vietnam’s aquaculture exports to the EU in both long run and short term
by using the ARDL model. Thereby proposing specific solutions to boost Vietnam’s export
turnover to the EU market, contributing to the sustainable development of the national fisheries
industry. The subsequent sections of the study are organized as follows: Section 2 introduces the
theoretical framework for our analysis. Section 3 presents our methodologies. Section 4 describes
our main findings, which are successively discussed in section 5. Lastly, section 6 elaborates a
conclusion synthesizing our research findings and implications.
2. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
While fisheries products have become globally traded commodities, the sector has led to
increasing degrees of export dependency for producing regions (Brookfield et al., 2005; Jones et
al, 2014; Salz & MacFayden., 2007). Such dependency generates several social and economic
risks which become accentuated at times of challenge to supply or demand (Campling et al., 2012;
Jennings et al., 2016). The complexities inherent in the relations of exploitation and

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commodification are also influenced by extra-sectoral factors, such as politically-influenced free-
trade agreements.
Several studies have employed the gravity model to examine the determinants of seafood
export performance (Yang et al., 2020; Natale et al., 2015; Sandaruwan & Banerjee, 2020; Dong
& Truong, 2022). This model posits that trade volumes between countries are influenced by
economic indicators such as GDP, per capita income, geographic distance, exchange rates, and
trade policy openness. GDP serves as an indicator of a country’s prosperity and standard of living,
with higher values often correlating with increased trade activity. Additionally, larger populations
can drive production and exports due to the availability of cheap labor (Baker & Yuya, 2020).
Developing economies have frequently employed macroeconomic factors such as the currency
rate, inflation, investment, and so on to manage trade flow (Manu, 2022). Additionally, exchange
rates are pivotal in shaping trade dynamics, with currency depreciation making domestic goods
more competitively priced on the international market, thereby stimulating export growth (Agénor
& Montiel, 2015). However, the impact of exchange rates on trade balance is complex and may
vary in the short and long term, as evidenced by both positive and negative correlations in various
studies (My et al., 2017). Furthermore, rising inflation can alter trade patterns, particularly as
countries adjust their import strategies in response to changing economic conditions (Gephart &
Pace, 2015). For instance, countries experiencing high inflation may shift their focus towards more
affordable seafood options, impacting the export strategies of seafood-producing nations (Yang et
al., 2020). Thus, if inflation in developed countries leads to reduced imports, it can significantly
affect the trade dynamics for developing nations reliant on seafood exports. Thus, we propose the
following hypotheses:
● H1: Higher GDP in importing countries positively impacts Vietnam’s seafood export
turnover
● H2: Larger populations in importing countries positively impact Vietnam’s seafood export
turnover.
● H3: Higher inflation rates in importing countries negatively impact Vietnam’s seafood
export turnover.
● H4: An increase in exchange rates negatively impacts Vietnam’s seafood export turnover.
As the aquaculture industry grows and expands into new markets, it becomes more
vulnerable to trade disputes arising from geopolitical tensions. Historically, political instability has
disrupted trade routes and the movement of goods (Magdy, 2017). Current geopolitical conflicts,
such as those in Russia, Ukraine, and Yemen, pose significant challenges to the future of
aquaculture production and value chains (Ahmed & Azra, 2022; Liu, 2024).The relationship
between political ties and food export stability is particularly pronounced. The theoretical literature
has consistently shown that policy uncertainty can significantly hinder trade flows (Dixit, 1989;
Handley, 2014; Handley and Limão, 2017; Tam, 2018). When trade-related investments are
irreversible or have high sunk costs, rising uncertainty can make firms more hesitant to enter new
markets and reduced trade activities (Jia et al., 2020). Additionally, can also discourage consumer
spending, as individuals may choose to delay purchases and adopt a more cautious approach,
thereby impacting trade flows (Dixit, 1989; Tam, 2018). Moreover, rising policy uncertainty can
foster pessimistic expectations among entrepreneurs regarding future market demand in partner
countries (Nguyen, 2012), potentially leading to adjusted trade plans and reduced investments.

301
Furthermore, research indicates that deteriorating political relationships can lead to increased tariff
and non-tariff barriers, thus destabilizing food exports, including seafood (Zhou, 2023). This
instability is often exacerbated by political events that create uncertainty in trade agreements,
causing hesitation among both exporters and importers and disrupting established supply chains
(D’Odorico et al., 2014). For Vietnam, this uncertainty could further complicate international
trade, potentially impacting its ability to maintain a competitive edge in the global seafood market.
Given the previous literature, we propose the following hypothesis:
H5: Increased political uncertainty negatively impacts Vietnam’s seafood export turnover.
3. DATA AND METHODOLOGY
3.1. Data
This study uses panel time series data of 23 EU countries over the period of 2004 to 2022.
Based on the experience from reviewing existing literature, this paper uses the following time
series variables in this study:
LnEx: Logarithm of export value of Vietnam to 23 EU countries as dependent variable. This
variable represents the natural logarithm of the export turnover, capturing the total value of goods
exported to specific markets. Using the natural logarithm of export turnover allows for better
interpretation of percentage changes and reduces potential skewness in the data. This variable
serves as a proxy for the export performance of a country and is often used in econometric models
to measure the impact of various factors on exports.
LnGDP: Logarithm of Gross Domestic Product (GDP) in each 23 countries. LnGDP denotes the
natural logarithm of the Gross Domestic Product of the importing countries. GDP is a key indicator of
economic activity, reflecting the total value of goods and services produced in an economy. By using
its logarithmic form, the variable captures the elasticity of exports concerning economic growth in the
importing countries. Higher GDP levels often indicate greater purchasing power and demand for
imports, which can positively impact the export value of the exporting country.
LnPOP: Logarithm of population in imported countries. LnPop represents the natural
logarithm of the population size in the importing countries. Population size is a crucial determinant
of market size, with larger populations typically indicating higher demand for goods and services,
including imports. The logarithmic transformation helps in assessing the relative change in export
turnover associated with changes in population size, making it easier to interpret the results in
percentage terms.
INF: Inflation rate of 23 EU countries over the period. The inflation rate (INF) measures the
annual percentage change in the price level of a basket of goods and services in the importing
countries. Inflation can affect the competitiveness of exports by influencing the cost structure and
pricing of goods. A higher inflation rate in importing countries can erode purchasing power, reduce
demand for imports, and negatively impact export turnover. Conversely, it can also lead to
increased demand for cheaper imports if domestic goods become relatively more expensive.
REER: is the exchange rate. In this paper, the exchange rate was measured using a bilateral
exchange rate where the VND was quoted against the EUR. An increase in REER indicates that
the domestic currency has appreciated, making exports more expensive and potentially reducing
export turnover. Conversely, a decrease in REER suggests a depreciation, which can enhance
export competitiveness by making goods cheaper in foreign markets.

302
 WUI: The World Uncertainty Index (WUI) quantifies global political and economic
uncertainty. It is derived from reports and publications that reflect the level of uncertainty in the
global economy. High levels of uncertainty, as captured by the WUI, can have a negative impact
on trade flows, as businesses and consumers become more cautious in their spending and
investment decisions. In this research, WUI is used to assess how global uncertainty affects the
export performance of a country, with higher uncertainty likely leading to reduced export turnover.
The sources of Export value, GDP, population, inflation rate and real exchange rate are the
world development indicators database of the World Bank, Trade Map and IMF.
Figure 1: Research model

Source: Authors
3.2. Methodology
At first, Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests were conducted to
assess the stationarity of all time series variables. Subsequently, an Autoregressive Distributed Lag
(ARDL) model was employed to explore the short-run and long-run relationships between
economic and political uncertainty and aquaculture export growth. The Long-Run Form and
Westerlund cointegration tests verified the existence of a long-run relationship, while the Error
Correction Form examined the short-run dynamics among the variables.
3.2.1. Stationarity Test (Unit Root Test)
In time series analysis, it is very important to use a stationary time series to avoid spurious
causality. Spurious causality refers to a strong relationship between two non-stationary time series
variables, while no causality exists between them. If mean, variance and autocovariance of a time
series do not depend on time, then the series is known as stationary (i.e. no unit root). Otherwise,
it is known as non-stationary time series (i.e. unit root) (Gujarati, 2009). If the stationarity test
shows a time series as stationary at level (without differencing, i.e., Yt), then the series will be
integrated of order 0 or I (0). On the other hand, if the test shows a series as stationary at first
difference (i.e., Yt – Yt-1), then the series will be integrated of order 1 or I (1).
- Augmented Dickey-Fuller (ADF) Test
ADF test is based on the following regression equation:
𝑛

∆𝑌𝑡 = 𝛼1 + 𝛼2 𝑡 + 𝛿𝑌𝑡−1 + ∑ 𝑑𝑖 𝑌𝑡−𝑖 + 𝜇𝑡

𝑖=1

303
 Where, 𝑌𝑡−1 is the differenced past values of the process, 𝛼1 is the constant term, t is the time
trend, ∆ is the first difference operator, n is the optimum number of lags and 𝜇𝑡 is the pure white
noise term. The null hypothesis of the ADF test is 𝐻0 : 𝛿 = 0, i.e., the time series is non-stationary.
- Phillips-Perron (PP) Test
In addition to the Augmented Dickey-Fuller (ADF) test, the Phillips-Perron (PP) test cross
checks the stationarity properties of every time series variable. PP test does not require to select
the level of serial correlation as like ADF, i.e., no need to add lagged difference terms.
Hence, the PP test is based on the following regression equation:
∆𝑌𝑡 = 𝛼0 + 𝛾𝑡 + 𝛿𝑌𝑡−1 + 𝜇𝑡
Like the ADF test, the null hypothesis of the PP test is HO: δ = 0, i.e., the time series is
nonstationary (has a unit root).
3.2.2. Cointegration test
Cointegration tests identify scenarios where two or more non-stationary time series are
integrated together in a way that they cannot deviate from equilibrium in the long term. The tests
are used to identify the degree of sensitivity of two variables to the same average price over a
specified period of time. This is a prerequisite to test for the use of the ARDL. In this study, we
used Westerlund (2005) tests of cointegration on a panel dataset. Westerlund (2005) derived a pair
of VR test statistics for the null hypothesis of no cointegration. The default test uses a model in
which the AR parameter is panel specific and for which the alternative hypothesis is that the series
in some of the panels are cointegrated.
A hypothesis test is then performed to test if there exists a long-run relationship or not with
the following hypothesis:
𝐻0 : 𝛼1 = 𝛼2 = 𝛼3 = 𝛼4 = 𝛼5 = 0
𝐻1 : 𝛼1 ≠ 𝛼2 ≠ 𝛼3 ≠ 𝛼4 ≠ 𝛼5 ≠ 0
If the null hypothesis is rejected then this implies that there is a long relationship or
cointegration, in the long run, otherwise, there is no cointegration amongst the variables.
3.2.3. The ARDL Model
The ARDL (Autoregressive Distributed Lag) approach is a versatile method for analyzing
short-run and long-run elasticities in small sample sizes, utilizing the ordinary least square (OLS)
approach to examine cointegration between variables (Duasa 2007). It offers flexibility regarding
the order of integration of variables, making it suitable for models with independent variables that
are I(0), I(1), or mutually cointegrated (Frimpong & Oteng 2006). However, ARDL is not
applicable when any variable is I(2). This method’s adaptability and efficiency in handling various
integration orders make it a popular choice for econometric analysis, particularly in cases with
limited data availability or mixed integration orders among variables.
The general model specification of the ARDL test has the following structure:
𝑙𝑛𝐸𝑋𝑡 = 𝛿0 + 𝛼1 𝑙𝑛𝐺𝐷𝑃𝑡−1 + 𝛼2 𝑙𝑛𝑃𝑂𝑃𝑡−1 + 𝛼3 𝐼𝑁𝐹𝑡−1 + 𝛼4 𝑅𝐸𝐸𝑅𝑡−1 + 𝛼5 𝑊𝑈𝐼𝑡−1
𝑝 𝑝 𝑝

+∑ 𝛾1 ∆𝑙𝑛𝐺𝐷𝑃𝑡−1 + ∑ 𝛾2 ∆𝑙𝑛𝑃𝑂𝑃𝑡−𝑖 + ∑ 𝛾3 ∆𝐼𝑁𝐹𝑡−𝑖

𝑖=1 𝑖=1 𝑖=1
𝑝 𝑝

+∑ 𝛾4 ∆𝑅𝐸𝐸𝑅𝑡−𝑖 + ∑ 𝛾5 ∆𝑊𝑈𝐼𝑡−𝑖 + 𝜇𝑡
𝑖=1 𝑖=1

304
 Where, 𝑝 refer to the optimal lag order of the dependent variables and the 𝑞 represent the
optimal lag order for the regressor in the model, 𝛿0 is the constant term, 𝛼1 ,... , 𝛼5 refer to the long-
run parameters, the coefficient 𝛾1 , ... , 𝛾5 demotes the short run parameter and 𝜇𝑡 represent the
error term.
4. EMPIRICAL RESULT
4.1. Descriptive Statistics
There are five variables in this study. Table 1 shows the descriptive statistics for all of the
research variables.
Table 1: Descriptive statistics
lnEX lnGDP lnPOP INF REER WUI
Mean 45182.64 6.38e+11 1.91e+07 2.6209 0.0000407 0.2025986
Median 7893 2.60e+11 1.01e+07 1.936341 0.0000394 0.186837
Maximum 403204 4.28e+12 8.38e+07 20.06267 0.0000512 1.094417
Minimum 0 1.44e+10 1879383 -9.653676 0.0000349 0
Std. Dev. 70816.89 9.11e+11 2.23e+07 2.984424 4.95e-06 0.1287108

Source: Authors
4.2. Stationarity Test (Unit Root Test)
To identify the order of integration, this study uses different unit root tests. Table 2 shows
the unit root test results in Augmented Dicky-Fuller (ADF) and Phillips-Perron (PP) method by
using the time trend with constant.
Table 2: Unit root test
Variable At level At 1st Difference Remarks
ADF PP ADF PP I(d)
lnEX -6.6732 -11.9366 I(0)
(0.0000)*** (0.0000)***
lnGDP -0.7388 -2.3376 -7.1650 I(0)
(0.2300) (0.0097)*** (0.0000)***
lnPOP -0.0727 4.3810 -3.4895 1.2859 I(1)
(0.4710) (1.0000) (0.0002)*** (0.9008)
INF -3.6238 4.3724 -12.3882 I(0)
(0.0001)*** (1.0000) (0.0000)
REER -9.5454 7.7734 -13.4629 I(0)
(0.0000)*** (1.0000) (0.0000)***
WUI -4.9443 -8.3992 I(0)
(0.0000)*** (0.0000)

Note: ***Rejection of null hypothesis (series is non-stationary) at the 1% level

I(d) denote the order of integration.
For ADF the lag lengths selection is based on AIC (Akaike, 1974). For PP the bandwidth
selection is based on Newey and West (1994) method using Bartlett Kernel
Source: Authors

305
 The results of both ADF and PP test, reveals that lnEX, lnGDP, INF, REER and WUI are
stationary at the level, i.e., they are integrated in 0. While lnPOP are stationary at first difference,
i.e. they are integrated in 1. Hence, all the variables are integrated at I (0) and I (1).
4.3. Cointegration test
Table 4: Westerlund test for cointegration
Statistic P-Value
Variance ratio -1.4947 0.0675

Source: Authors
The VR test statistic rejects the null hypothesis of no cointegration between export turnover,
gdp, population, inflation, exchange rate and political uncertainty. The test showed that the null
hypothesis (no cointegration) can be rejected at 10% significant level and conclude that there is a
long-run relationship among the variables.
4.4. The ARDL Estimation
Since there is a long-run relationship among the variables, the study examines the
significance of long-run coefficients and report the estimated results in the table below:
Table 5: Long-run Estimates
lnEX Coefficient Std.Err Z P-Value
lnGDP 0.9340 0.3192 2.93 0.003
lnPOP 1.9863 0.9929 2.00 0.045
INF 0.0426 0.0237 1.80 0.072
REER -4836.4 10167.7 -0.48 0.634
WUI -0.3913 0.2308 -1.70 0.090

Source: Authors
The results suggest that an increase in the GDP, population of the importing countries is
associated with a significant increase in seafood export turnover. Specifically, GDP and population
positively affect seafood export turnover at a 5% level of significance, likely reflecting the
economic capacity and market size of these countries, which aligned with our initial hypotheses
(Hypotheses 1 and 2). However, contrary to hypothesis 3, the inflation rate (INF) also shows a
positive and significant impact on seafood export turnover in the long run, albeit at the 10%
significance level. This unexpected result suggests that inflation, rather than deterring demand,
may instead reflect underlying economic conditions in the importing countries that still support or
even stimulate seafood imports. Thus, our hypothesis 3 is not validated.
The results indicate that, in the long run, a 1% increase in political uncertainty, as measured
by the World Uncertainty Index (WUI), is associated with a 0.3913% decrease in export turnover,
with this effect being statistically significant at the 10% level, consistent with our hypothesis 5.
This finding suggests that heightened political uncertainty can have a detrimental impact on export
activities, potentially due to increased risks and uncertainties in the international trade
environment, leading to cautious behavior among exporters.
The long-run estimation for the real effective exchange rate (REER) shows no significant
impact (p-value = 0.634), suggesting that exchange rate fluctuations do not substantially affect

306
export performance over extended periods. However, the short-run analysis tells a different story.
It demonstrates that the exchange rate significantly influences Vietnam’s seafood export turnover
in the near term . The coefficient of -0.8205 (p-value = 0.035) indicates a strong negative
relationship, leading to the acceptance of hypothesis 4.
Table 6: Short-Run Estimates
lnEX Coefficient Std.Err Z P-Value
lnGDP
D1 -0.4831 0.6720 -0.72 0.472
lnPOP
D1 -60.5903 42.7319 -1.42 0.156
INF
D1 -0.0289 0.0220 -1.32 0.188
REER
D1 -0.8205 39015.21 -2.10 0.035
WUI
D1 0.7474 0.6006 1.24 0.213
ECT
-0.4886 0.0526 -9.29 0.000

Source: Authors
Furthermore, the error correction is negative and statistically significant at 5%. The result
of the ECT represents an adjustment to the state of equilibrium following the shocks. The result
indicates that the previous year’s deviations from the long-run equilibrium effect in the short run.
From the results, when there is a disequilibrium in the short run, the coefficient means that long-
run equilibrium will be restored at a speed of about 48.8%.
5. DISCUSSION AND RECOMMENDATION
The result reveals significant long-term relationships between the dependent variable and
several independent variables. Notably, the gross domestic product and population of the
importing countries showed correlations consistent with our initial hypotheses and previous
research (Jaco et al., 2021; Vogiatzoglou, 2019). These findings suggest that increased economic
activity, population growth, and higher inflation rates in importing countries are associated with
higher export values over time. Interestingly, while we hypothesized that higher inflation rates
would negatively impact export turnover, the results indicate a positive relationship. This
unexpected outcome might be explained by the exporting country’s ability to maintain or enhance
its competitiveness through favorable exchange rates or lower production costs. For instance, if
the exporting country’s currency depreciates relative to that of the importing country, its goods
become more attractive to foreign buyers, potentially offsetting the negative demand effects of
inflation in t’e importing country (Arora & Rakhyani, 2020; Ektiarnanti, 2021).
Moreover, political uncertainty was found to have a negative and significant effect on export
turnover, indicating that increased political instability can hinder export performance, the result
consistent with recent literature (Bahmani‐Oskooee & Baek, 2021). Political instability can lead
to a decrease in firms’ willingness to engage in export activities, firms are less likely to export

307
when they perceive a high level of political risk (Krammer et al., 2018) as they often delay or
reduce their export activities due to the unpredictability associated with political changes (Kapri,
2019). The uncertainty surrounding political changes can lead to increased costs and risks
associated with exporting, as firms may face sudden changes in trade policies, tariffs, and
regulatory environments. While the long-term impact may be less significant than initially
perceived, the exchange rate in short-run have a substantial impact on Vietnam’s seafood export
turnover. This is consistent with previous research, which indicates that exchange rate fluctuations
play a crucial role in determining trade balances, particularly in emerging markets (Kumar &
Begam, 2020; Nguyen & Do, 2020). The short-run effects of exchange rate increases can be
compounded by the fact that many exporters may not be able to adjust their pricing strategies
quickly enough to mitigate the impact of currency appreciation.
Given these findings, we recommend that policies focus on strengthening economic ties and
capitalizing on population-driven demand in key import markets. Efforts should be made to
stabilize domestic inflation to maintain export competitiveness. Additionally, considering the
negative impact of political uncertainty, it is crucial to establish stable political and economic
environments both domestically and in partner countries to foster consistent export growth. While
exchange rate fluctuations appear to have a primarily short-term effect, long-term stability should
be pursued to minimize potential disruptions to export performance.
6. CONCLUSION
This study examined the intricate relationship between economic factors and political
uncertainty on Vietnam’s seafood export turnover to 23 EU countries over the period 2004-2022.
Employing the ARDL model, we investigated both short-run and long-run effects, finding
significant long-run impacts of GDP, population, and inflation rates in importing countries on
Vietnam’s seafood exports. These results underscore the importance of economic growth,
demographic changes, and price stability in driving demand for Vietnamese seafood products.
Our analysis also revealed a negative and significant impact of political uncertainty on export
performance, underscoring the need for stable political environments to foster consistent export
growth. In the short run, exchange rate fluctuations emerged as a key determinant, with currency
depreciation in importing countries leading to a decline in Vietnamese exports. Given the
substantial long-run influence of economic factors on export turnover, we recommend that policies
prioritize strengthening economic ties and addressing population-driven demand in key import
markets. Domestic efforts to stabilize inflation are essential to maintain export competitiveness.
Moreover, the negative impact of political uncertainty necessitates the creation of stable political
and economic environments both domestically and in partner countries to support sustained export
growth. While exchange rate fluctuations have a short-term effect, long-term stability is crucial to
minimize their disruptive influence on export performance.
Future research could expand on this study by examining the interaction between economic
and political factors with additional variables, such as trade policies or market diversification
strategies. A comparative analysis with other exporting countries could also provide valuable
insights into the global seafood trade dynamics.

308
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