What Does Vietnam Gain When Its Currency Depreciates?
Round 1
Reviewer 1 Report
This study examines the behaviors of the export and stock price to the changes of exchange rates in Vietnam. It was interesting to read.
What I miss is a little discussion about whether there are other (omitted) variables that also affect the result. In the period from the year 2000 to 2020, the economy in Vietnam has developed, the products that are produced today have a higher quality than what was produced 20 years ago. In addition, it is possible that Vietnam has also built up a good reputation when it comes to delivering to the agreed quality at the agreed time. During the same period, China's economy has seen tremendous growth. I would think that this has also affected the economic development of Vietnam. To what extent do such factors affect the results?
The text in the figures is difficult to read. This should be improved.
When it comes to the method, the article will be pedagogically better if you concretize it more in relation to the problem. I think it will make it easier for the average reader.
Author Response
Reviewer 1 Comments
This study examines the behaviors of the export and stock price to the changes of exchange rates in Vietnam. It was interesting to read.
What I miss is a little discussion about whether there are other (omitted) variables that also affect the result. In the period from the year 2000 to 2020, the economy in Vietnam has developed, the products that are produced today have a higher quality than what was produced 20 years ago. In addition, it is possible that Vietnam has also built up a good reputation when it comes to delivering to the agreed quality at the agreed time. During the same period, China's economy has seen tremendous growth. I would think that this has also affected the economic development of Vietnam. To what extent do such factors affect the results?
The text in the figures is difficult to read. This should be improved.
When it comes to the method, the article will be pedagogically better if you concretize it more in relation to the problem. I think it will make it easier for the average reader.

Response: The results of the study aim to contribute to the discussion of Vietnam's monetary policy when the U.S. raised the issue of currency manipulation and put Vietnam on the observation list. The strong economic development of the neighboring country - China - has more or less affected the foreign trade of Vietnam. Thank you for suggesting a potential topic for my future research.
The text in the figures has been improved.
Reviewer 2 Report
The manuscript is not innovative and its reading has let me doubtful.
From a formal point of view, the manuscript shows many inaccuracies.
For instance, just selecting the beginning of Section 3.1:
- "Markov switching model (MSDR)", you have to write "Markov switching dynamic regression (MSDR)" or "Markov switching model (MSM)"
- in (1) the parameter \beta has no subscript i.
- the sentence "?? is the conditional mean of ?? in regime n." is not clear given that we have n regimes.
From a substantial point of view, the manuscript seems to report an application of a statistical model with some comments. The impression is that of reading not a scientific article.
I can suggest extending the study taking into account the time-varying version of the Markov switching model. This extension makes the article more robust and the application could be considered sophisticated.
Moreover, the Authors have to carefully check notation and sentences, so to avoid that some parts of the article could be unclear.
Author Response
Response: Markov switching dynamic regression (MSDR) was used for accuracy and uniformity throughout the article. I have carefully checked and corrected equations, notations, and sentences. In my opinion, the best research model is the one that fits the data and gives objective results. The data in this study may not need to use the time-varying version of the Markov switching model or other research methods.
Thank you for your valuable suggestions.
Reviewer 3 Report
Very well constructed paper with appropriately used methodology. Only minor issues.
English proof-reading required - many grammar issues
Brief theoretical outline of triple regime-switching model needed in lit section, and why it is relevant here.
Explanation required as to why results for Vietnam would be of interest to non-Vietnamese readers
The data include the 2008/2009 crisis period and 2020 Covid period with no indication that authors tested to see if there was structural differences.
Author Response
Response:
I have carefully checked and corrected equations, notations, and sentences.
The reason why the triple regime-switching model was chosen as the model fitting for the data is explained in lines 189-197 “The Markov switching dynamic regression shows different dynamics across unobserved regimes using regime-related parameters to adapt to structural breaks or other multistate phenomena. To determine the number of regimes for the MSDR model, the structural break test of Bai-Perron (1998) is applied. This method detects the breakpoints of the relationship between Ln_EXP vs. Ln_EXR and Ln_VNI vs. Ln_EXR. As Table 4 reported, two breakpoints are detected for both equations, in other words, the MSDR model with three states is appropriate for examining the nonlinear dynamic effect of EXR on EXP and VNI. The three states can be thought of as representing low, moderate, and high-growth states.”
The results of the study aim to contribute to the discussion of Vietnam's monetary policy when the U.S. raised the issue of currency manipulation and put Vietnam on the observation list.
June 2005 and May 2012 are two structural breakpoints detected for the relationship between Ln_EXP vs. Ln_EXR; February 2006 and January 2013 are two structural breakpoints detected for the relationship between Ln_VNI vs. Ln_EXR. These results show that the data is affected by nor 2008/2009 crisis period neither the 2020 Covid period.
Round 2
Reviewer 2 Report
The paper has slightly improved. The originality is low. Some inaccuracies have not been removed. E.g. in (1) we have \mu_t(s_t), then in (5) we have \mu(s_t), so the Authors should explain why \mu_t(s_t) collapses in \mu(s_t); in (5) the component \epsilon_t has a variance equal to \sigma^2_t, but we also have the term \sigma(s_t) which is multiplied by \epsilon_t, are you sure that the variance is \sigma^2_t and not 1?
Author Response
Please see the attachment.
Thank you,
Author Response File: Author Response.pdf