The impact of macroeconomic factors on the Stock market in Viet Nam

Abstract

The research aims to analyze the influence of macroeconomic factors and the price of Bitcoin on the growth of stock market value in Viet Nam. The VN-Index is used to represent the growth of Vietnam's stock market value because the capitalization of the HOSE exchange accounted for over 93.3% of the total market capitalization at the end of 2023. The primary macroeconomic variables examined include Industrial Production Growth, Export Turnover Growth, Inflation, Money Supply Growth, and Foreign Direct Investment. Utilizing an Autoregressive Distributed Lag (ARDL) model on a time-series dataset from 2011 to 2023, the estimation results indicated that the Bitcoin price, Export Turnover Growth, Money Supply, and FDI all exert a positive influence on the VN-Index in both the short and long run. Conversely, Industrial Production Growth shows a negative impact across both time horizons. Inflation, measured by the Consumer Price Index, positively affects the market in the short run but proves to be statistically insignificant in the long run. Based on these findings, the research proposed several policy implications, such as completing the legal framework for cryptocurrencies, enhancing market transparency to reduce speculation, promoting exports, adhering to targeted inflation control, implementing flexible money supply management, and improving procedures to better attract FDI.