An Analysis of the Dynamic Causal Relationship between Vietnamese Imported Shrimps and Domestic Shrimp Production

The purpose of this study is to analyze the causal relationship between domestic shrimp production and imported shrimp using a Vetor Autoregressive(VAR) model. The variables used in the model include domestic shrimp production volume and producer price, as well as the Vietnamese shrimp import volume and price. Results of Granger causality tests and VAR model revealed significant interdependencies between shrimp production and imports. The Vietnamese import price emerged as the leading variable, followed by the producer price, production volume and Vietnamese import volume. Additional VAR-X models incorporating the Korea-Vietnam FTA as exogenous variables showed that after the FTA, Vietnamese import volumes increased while prices decreased, and domestic producer prices rose. This indicates that FTA increased import volume however, there was no decline in producer price likely due to the segmentation between domestic and imported markets.