Author(s)

Nguyen Khac Minh¹, Pham Van Khanh², Nguyen Viet Hung³

¹Economics and Management Faculty, Thang Long University, Hanoi, Vietnam.
²Institute of Economics and Corporate Group, Hanoi, Vietnam.
³Faculty of Economics, National Economics University, Hanoi, Vietnam.

The objective of this research is to examine impacts of exchange rate volatility and FDI on efficiency of the Vietnamese agricultural sector at the provincial level for the period 1998-2011. Due to the characteristic of high uncertainty in agricultural production, the chance-constrained programming model would be used to estimate efficiency of the agricultural production sector. In order to study impacts of exchange rate volatility and FDI, we employ the two-stage model. In the first stage, we use the chance-constrained programming model to measure technical efficiency and ARIMA model to quantify exchange rate volatility. In the second stage, we use the fixed effect model to evaluate impacts of exchange rate volatility and FDI on efficiency of agricultural production in poor and rich provinces. The estimated results show that fluctuation in exchange rate volatility would reduce efficiency in agricultural production but FDI has an insignificant impact on the efficient production in Vietnam agricultural sector.

Chance-Constrained Programming, DEA, Exchange Rate Volatility, FDI, Technical Efficiency

Minh, N. , Khanh, P. and Hung, N. (2015) Impacts of Exchange Rate Volatility and FDI on Technical Efficiency—A Case Study of Vietnamese Agricultural Sector. American Journal of Operations Research, 5, 317-325. doi: 10.4236/ajor.2015.54025.