Can Countries Manage Their Financial Conditions amid Globalization? Evidence from Vietnam

Abstract

This research aims to determine whether global conditions influence the control of Vietnam's national financial condition or not by using internal and external variables. The financial markets in the world have been rapidly integrating into the global market that today the concept of "financial integration" is gradually being replaced by a new broader concept that is "financial globalization". That is considered an indispensable part of the process of economic globalization. However, this level of deepening integration can be seen as a factor increasing the extent of the impact of global financial conditions on financial conditions in each country. This article examines the practice in Vietnam based on comparing the FCI Vietnam index with the FCI Singapore in the period 2000-2020. The research results show that global financial conditions impact Vietnam's national financial condition index in the context of integration. By applying different methods of constructing the financial condition index, the financial condition variables show different relationships with the corresponding FCI curves.