Lao Journal of Economics and Business Management

COVID-19’s Impact on ASEAN Country Stock Markets

Phouphet Kyophilavong — 2024-06-07

In this study, we examine the impact of COVID-19 on ASEAN countries' stock markets. In our examination, we have applied an econometrics model: the GARCH model. We find that the daily number of new cases had a significantly positive impact on IDX (Indonesia Stock Exchange) and MYX (Bursa Malaysia)but a negative impact on PSE Philippine Stock Exchange), SGX (Singapore Exchange), SET (The Stock Exchange of Thailand), and HSX (Ho Chi Minh Stock Exchange). Furthermore, the daily number of new deaths significantly affected the PSE, SGX, SET, and HSX but not the IDX and MYX indices. The results show that COVID-19 had an effect on the stock markets of ASEAN; however, that effect varied.

Empirical Analysis of Exchange Rate Pass-Through in Lao PDR.

Khaysy Srithilat — 2024-06-07

This paper provides a comprehensive analysis of exchange rate pass-through (ERPT) trends and their impact on inflation in Laos. The research used a Vector Autoregression (VAR) model to analyse the interaction between important macroeconomic variables. It also utilises impulse response function analysis and variance decomposition to further investigate this relationship. The results of empirical research show that exchange rate, oil price and aggregate money has significant impact on inflation in Laos. The paper highlights the significance of policymakers in Laos taking into account ERPT mechanisms when formulating monetary and fiscal policies.

The Spillovers from US Stock Market to ASEAN Markets Before and During COVID-19: Granger Causality in the Frequency Domain

Phongsili Soukchalern — 2024-06-09

We investigate the spillovers from the US stock market to ASEAN stock markets before and during the COVID-19 pandemic. Our aim is to answer the question of whether any shock to the returns from the US stock market spills over to those from the ASEAN stock markets. We use daily data for the period from 4 January 2017 to 27 December 2021 for the Granger causality in the frequency domain. Our empirical results indicate that a shock to the returns the US stock market spills over to ASEAN stock markets both before and during COVID-19. This finding makes a potentially significant contribution to investors and regulators in the terms of risk management and hedging strategies.

Determinant Factors Influencing Hotel Room Price in Vangvieng, Lao PDR: An Application of Hedonic Price Model.

Pakaiphone Syphoxay — 2024-06-11

This study aims to examine how hotel room attributes, hotel services, and environment (located close to river) influence hotel room prices. The Econometric estimation using the semi-logarithmic form for the Econometric equation was applied. Data on hotel attributes, services, and environment were gathered from the “Agoda.com” website. The findings suggest that the room attributes include: room size, air conditioning, and balcony, can influence room prices. In addition, hotel services include: providing breakfast, spas and massage, allowing for pets and smoking also affect the room rates. Hotel environment such as locating close to a river also significantly increase Tourists’ willingness to pay. Hotels can strive benefits of understanding customers’ needs and expectation and provide services, products according to their needs.

The effects of the COVID-19 pandemic on household finances and management in Laos

Bounmy Inthakesone — 2024-06-12

This research explores the borrowing situation in major cities of Lao PDR and assesses the impact of the Covid-19 pandemic on borrowing activities. Data was collected from Lao Telecommunication Customers between August 2021 and January 2022 via a Google Forms questionnaire, involving participants primarily from Vientiane Capital, Luangprabang, Savannakhet, and Champasack. The study employed descriptive and econometric methods to analyze the data. It revealed a substantial portion of participants engaged in borrowing, with patterns influenced by factors such as gender, ethnicity, and borrowing experience. Interest rates increased significantly during the pandemic. Borrowing was mainly for household goods and food consumption. The pandemic led to an increased tendency to borrow and higher borrowing amounts. Policymakers need to address the rising debt and interest rates by providing financial compensation to those adversely affected and implementing measures to control interest rates, loan conditions, and repayment periods. Additionally, government and aid organizations should support those impacted by the pandemic in sustaining their livelihoods.

The Factors influencing farmers' decision to join Paksong Coffee Production Cooperative, Paksong District, Champasak Province, Lao PDR

Salongxay Fongsamouth — 2024-06-12

This paper aims to study the factors that influence the decision to join a coffee production cooperative, using the logit model to estimate. The comparison of economic factors is done using t-test statistics. The results indicated that factors affected the decision to join the cooperative are: the gender of the household head; ethnicity; occupation of the household head based on farming; experience in coffee cultivation; coffee cultivation area; access to credit; average return per hectare; and receiving training. In terms of economic factors, it was discovered that households that are members of cooperatives have a lower average cost of Robusta coffee production than households that do not join cooperatives, but the average cost per hectare for medium coffee is not different. However, in terms of quantity of production and income from coffee production, it was found that the quantity of coffee production in both groups is not statistically significant

Relationship between SMEs’ Resources and their Sustainable Growth with moderating of government-private supports, and gender of entrepreneurs, in Lao PDR

Souksavanh Nouanpaseuth — 2024-06-14

This paper aims to investigate the relationships between resources including, financial resources (FRR), financial literacy (FLR), managerial capacities (MCR), market orientation (MKR), technological innovation awareness (TIR), and SME’s sustainable growth (SG), both in finance (FSGE) and non-finance (NFSGE), and to identify the impact of government support (GS), private support (PS), and Gender of entrepreneur moderate the effect of these resources on their SG. Using the survey method and adopted a random sampling technique. Data was collected with 517 SME owners/managers. The Structural Equation Modelling, Interaction effects, Multiple group techniques, and SPSS/AMOS version 23 for hypothesis testing. The study model revealed the resources contributed a 43.8 percent and 35.5 percent variance in FSGE and NFSGE, respectively. Results confirmed 15 out of 40 hypotheses: the effect of FLR and TIR on both FSGE and NFSGE; and MKR on NFSGE. GS moderated the relationships between resources (FLR, MCR, MKR, TIR) and FSGE. PS impact on the effect of MKR, and TIR on both FSGE and NFSGE. The gender of the entrepreneur moderated the relationships between resources and the SGSMEs in the study model. Particularly, in the relationship between MKR, TIR, and FSGE. This evidence supports existing theories and contributes to informing the importance of businesses’ resources in enhancing operational business sustainable growth. Emphasize the need for authorities, agencies and other partners can find out how to increase support for various interventions, programs and/or initiatives to empower SMEs to improve their resources in terms of tangible and intangible ways to achieve sustainable business growth.

The Agripreneurship in the Lao P.D.R: Motivation, Characteristics, and Success Factors

Vannisa Thammachak — 2024-06-21

This study aims to investigate three key areas, agricultural entrepre-neurship motivation factors, agricultural entrepreneurship characteristics; and agricultural business operators' success factors in Lao P.D.R. The research samples are successful agripreneurs in Vientiane Capital, Vientiane Province, Savannakhet Province, and Champasack Province, totaling 53 successful agripreneurs with the criteria of 5 years in business operation. The study found that agripreneurs in Laos are motivated by the prospect of success, passion for agriculture, and economic opportunities. They need experience, organizational growth, and legal autonomy. Successful Laotian agripreneurs have high scores in various attributes, including leadership, financial comprehension, and commercial knowledge. However, barriers to growth include lack of resources, expertise, and legal knowledge. Seasonal diseases, exchange rate fluctuations, inflation, and challenges like perishable products, policies, and technology also pose challenges.

DIGITAL MARKETING'S IMPACT ON MSMEs FINANCIAL PERFORMANCE IN LAOS

Viengsavang Thipphavong — 2024-06-22

The study examines the influence of digital marketing on the financial and operational performance of Laos-based firms using Smart PLS4 Structural Equation Model (SEM) method. The results showed that online advertising, social media and content marketing have significant impact on financial performance of Lao MSMEs. Mobile marketing, however,does not significantly affect enterprise’s financial performance. As a result, Laos firms primarily use online advertising and low-cost online media, but they should focus on offline advertising and digital marketing tools for improved financial performance. Policy recommendations include promoting digital IT access, managing digital marketing, providing IT training for entrepreneurs, educating remote enterprises, focusing on e-commerce, enhancing security, and implementing monitoring systems. Fiscal incentives and sector collaboration can encourage more investment in digital marketing. Community-based digital platforms can be an alternative for MSMEs with limited capital.

External Finance and Labor Productivity in Laos: Impacts and Mechanisms

Nilaphy Phommachanh — 2024-06-26

Small and medium-sized enterprises (SMEs) are crucial for a country's growth and development, yet many face challenges in expanding due to limited access to finance. This study investigates the impact of access to external finance on firms’ labor productivity using data from the World Bank Enterprise Survey of Laos (2009-2018). Employing a novel double-lasso regression approach, this study confirms the positive effect of access to finance on SMEs' labor productivity. However, this effect diminishes as firms grow larger in size. Notably, the double-lasso regression simultaneously determines key factors influencing access to finance, highlighting security payments as a previously overlooked determinant. Moreover, investment in worker training is found to be a key mechanism for boosting firms’ labor productivity.