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The effects of free trade agreements on the stock market: Evidence from Vietnam.

Pham, H., Mudalige, P., Le, H., Bui, M., Nguyen, V., Ramiah, V., Chu, T. and Vu, T. H., 2024. The effects of free trade agreements on the stock market: Evidence from Vietnam. PLoS ONE, 19 (2), e0294456.

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journal.pone.0294456.pdf - Published Version
Available under License Creative Commons Attribution.


DOI: 10.1371/journal.pone.0294456


This study examines the effects of news events related to the European Union-Vietnam Free Trade Agreement (EVFTA) on the Vietnam stock market from 2010 to 2020. We calculate sectoral abnormal returns prior to, during, and after announcements and find that the Vietnamese stock market is susceptible to these events. We discovered that the announcement had a negative impact on the market, which might diminish the effectiveness of the Agreement. The findings show that more than half of Vietnam's sectors had an immediate reaction to EVFTA announcements, with fourteen reacting negatively and six responding positively. Two of the ten events did not have any immediate impact on these industries but all events resulted in either early or delayed reactions. We also find market scepticism and major changes in the deal led to the emergence of a diamond risk structure. We run multiple robustness tests to account for market integration and other factors that may affect stock returns. In addition, we explore potential sectoral systematic risk changes following these occurrences using different ARCH-type models. These additional tests confirm the robustness of our findings.

Item Type:Article
Uncontrolled Keywords:Vietnam; European Union; Industry
Group:Bournemouth University Business School
ID Code:39569
Deposited By: Symplectic RT2
Deposited On:05 Mar 2024 09:59
Last Modified:05 Mar 2024 09:59


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