My-Linh Thi Nguyen
Faculty of Finance and Banking, University of Finance - Marketing (UFM), Vietnam.

Toan Ngoc Bui
Faculty of Finance and Banking, Industrial University of Ho Chi Minh City (IUH), Vietnam.

DOI https://doi.org/10.33889/IJMEMS.2020.5.6.094

  ;

Abstract

This paper investigates the relationship between the real estate market (REM) and financial stability in Vietnam. Financial stability is measured using stock market volatility. The research is performed in Vietnam, a developing country whose stock and real estate markets are considered to be nascent, so the data series is very short. To solve this problem, the autoregressive distributed lag (ARDL) approach, which generates more valid results than its counterparts, is adopted. Furthermore, the ARDL approach is appropriate for a model with non-stationary data series and especially allows the analysis of the impact between data series in the short run and the long run. The results reveal the positive relationship between the real estate market and stock market volatility. However, this correlation only exists in the short run, which is a difference between Vietnam and developed countries. The paper also obtains an unprecedented finding confirming that the global financial crisis exerted a negative impact on the REM in Vietnam in the short run and the long run.

Keywords- Financial development, Global financial crisis, Real estate market, Stock market volatility, Vietnam.

Citation

Nguyen, M. T., & Bui, T. N. (2020). The Real Estate Market and Financial Stability. International Journal of Mathematical, Engineering and Management Sciences, 5(6), 1270-1283. https://doi.org/10.33889/IJMEMS.2020.5.6.094.