< PreviousMin-Joon Kim •394• effect on the volume of imports into Vietnam, in line with long-run estimates. This further supports the conclusion that Vietnam’s imports from Korea are relatively insensitive to exchange rate fluctuations in both the short and long run. Vietnam’s real income, however, plays an important role in shaping import patterns in the short run. As Vietnam’s economy grows, the demand for foreign goods increases, leading to higher imports from Korea. Diagnostic tests (Panel D of Table 3 and Figure 1) yielded results similar to those of the export function. Finally, the impact of global events is mixed—and somewhat counterintuitive. The 2008 financial crisis did not affect Vietnam’s exports to Korea but did lead to an increase in imports. This may be attributed to the structure of export goods—Vietnam mainly exports essential items with relatively stable demand—while imports rose due to increased foreign direct investment (FDI) from Korea and a higher demand for machinery and equipment to support domestic production. In contrast, the COVID-19 pandemic does not appear to have had a significant impact on either Vietnam’s exports to or imports from Korea. This may reflect the relatively stable maintenance of bilateral supply chains and effective trade support measures during that period. Ⅴ. Conclusion This study investigates how oil price shocks and macroeconomic variables affect bilateral trade between Vietnam and Korea. To achieve this, we apply the FARDL model, which captures detailed changes in the data structure over the period from January 2008 to December 2024. The findings indicate that oil price shocks have a positive short-run effect on both Vietnam’s exports and imports, while no significant long-run impact is observed. Regarding macroeconomic variables, Korea’s real income plays a key role in promoting Vietnam’s exports in the long run, although its short-run effects differ. In contrast, Vietnam’s real income influences its imports from Korea only in the short run, Energy Prices and Export–Import Behavior: The Vietnam–Korea Perspective •395• with no significant long-run effect. The bilateral real exchange rate significantly affects exports in the long run but has no short-run impact; meanwhile, it does not significantly affect imports in either the short or long run. 1. Policy Implications Based on the key findings from the FARDL model, policymakers and stakeholders should comprehensively assess the determinants of bilateral trade between Vietnam and Korea. For example, since Korea’s real income and the real exchange rate significantly influence Vietnam’s exports in the long run, exporters may consider expanding operations when the real exchange rate rises or when the Korean economy grows. Another important policy implication is the short-run impact of oil price shocks on both imports and exports. This highlights the need for policymakers to incorporate oil price fluctuations when evaluating factors influencing bilateral trade flows. Doing so may enhance the effectiveness of strategic trade policy formulation and management. 2. Limitations and future research This paper focuses only on the symmetric effects of oil price shocks, ignoring possible asymmetric responses. Moreover, the empirical models are limited to a few control variables—oil prices, real income, and the real exchange rate—while other factors that may significantly influence imports and exports, such as trade policy uncertainty, are not included. Therefore, the FARDL model may require reformulation to allow for a broader empirical framework. In addition, the analysis is conducted at the bilateral level, without disaggregating data by industry. These limitations may obscure the nuanced impacts of oil price fluctuations on trade flows. Future research may aim to address these gaps, providing a more comprehensive understanding.Min-Joon Kim •396• [References] Algaeed, A. H., “Symmetric oil price shocks and government expenditure-real exchange rate nexus: ARDL and SVAR models for an oil-based economy, 1970-2018,” Cogent Economics & Finance, Vol. 8, No. 1, 2020, pp. 1~18. Allegret, J. -P., V. Mignon, and A. Sallenave, “Oil price shocks and global imbalances: Lessons from a model with trade and financial interdependencies,” Economic Modelling, Vol. 49, 2015, pp. 232~247. Apergis, N., and P. 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Therefore, the initial nominal value of exports is measured in USD (source a), converted to VND, and adjusted by Vietnam’s consumer price index (CPI) (2010=100) (source a) to obtain the real value of exports. This approach is similar to that of Bahmani-Oskooee and Gelan (2018). =Real value of Vietnam’s imports from Korea. Similar to exports, the nominal values of imports (source a) are converted to VND and then adjusted using Vietnam’s CPI (2010=100) (source a). =Real income of Korea, represented by the all-industrial production index (2010 =100) (source c). =Real income of Vietnam, represented by the industrial production index (2010 =100) (source a).Min-Joon Kim •402• =Bilateral real exchange rate, calculated using the formula × , where: is the nominal exchange rate, defined as the number of Vietnamese Dong (VND) per Korean Won (KRW) (source a), and are the consumer price indexes (2010=100) of Korea and Vietnam, respectively (source a). =Crude oil prices, proxied by the Brent benchmark (source b). This study used Brent crude oil as the benchmark for global oil prices, as it is the most widely recognized and commonly used in the empirical literature examining the impact of oil price shocks on international trade. Oil prices were initially measured in USD, then converted to VND and adjusted using Vietnam’s CPI (2010 = 100), to obtain real oil prices. =Dummy variable for the 2008 global financial crisis, equal to 1 from 2008:M1 to 2010:M12 and 0 otherwise. =Dummy variable for the COVID-19 pandemic, equal to 1 from 2020:M1 to 2022:M12 and 0 otherwise. <Table A1> Summary statistics VariableObsMeanStd. Dev.MinMax log 20416.7850.74714.95317.800 log 20417.8210.62616.13518.786 log 2044.5270.1454.0434.826 log 2044.7210.1184.4225.005 log 2043.0160.0962.8023.379 log 20414.4240.37913.32615.219Energy Prices and Export–Import Behavior: The Vietnam–Korea Perspective •403• <Table A2> Correlation matrix Export model Variable log log log log log 1 log 0.9091 log –0.645–0.6531 log –0.528–0.3910.5541 Import model Variable log log log log log 1 log 0.0911 log –0.578–0.1941 log –0.5230.0850.5541Next >