Vietnam’s stock market with AEC

Abstract

During the integration process, the financial markets play an important role in attracting capital for the economy.
The integration of Vietnam’s stock market brings opportunities for the Vietnamese listed companies to have better
access to the investment resource from ASEAN Economic Community (AEC) and large economies in the world.
Using the vector autoregression model (VAR), this study analyzes the relationship between Vietnam stock market
and ASEAN stock markets and the stock markets of developed economies: US, Japan, Europe and China in two
periods: before (2000-2006) and after (2007-2016) Vietnam became a member of the World Trade Organization
(WTO). The results show that after joining the WTO, Vietnam’s stock market is affected by ASEAN stock markets
and the stock markets of US, Japan, Europe and China more than it was before WTO participation. Especially
after joining AEC, Vietnam’s stock market is found to be more integrated with ASEAN stock markets.