Advanced Research Journal of Banking, Economics and Finance (ARJBEF) ISSN 1273-2109: Vol. 2(1), pp. 026-034, November, 2019. A © Advanced Scholars Journals
Full length Research paper.
The measurement of the volatility of market risk of Viet Nam medicine industry after the low inflation period 2015-2017
Dinh Tran Ngoc Huy, MBA1*
1*Banking University, Ho Chi Minh city Viet Nam MBA, Graduate School of International Management, International University of Japan, Niigata, Japan
Accepted October 30, 2019
The Vietnam economy has gained lots of achievements after the financial crisis 2007-2011, until it reached a low inflation rate of 0.6% in 2015. This paper measures the volatility of market risk in Viet Nam medicine industry after this period (2015-2017). The main reason is the vital role of the medicine system in Vietnam in the economic development and growth in recent years always go with risk potential and risk control policies. This research paper aims to figure out how much increase or decrease in the market risk of Vietnam medicine firms during the post-low inflation period 2015-2017. First, by using quantitative combined with comparative data analysis method, we find out the risk level measured by equity beta mean in the medicine industry is acceptable, i.e it is little lower than (<) 1. Then, one of its major findings is the comparison between risk level of medicine industry during the financial crisis 2007-2009 compared to those in the post-low inflation time 2015-2017. In fact, the research findings show us market risk fluctuation, measured by equity beta var, during the post-low inflation time has decreased considerably despite of higher asset beta max and asset beta var. Finally, this paper provides some ideas that could provide companies and government more evidence in establishing their policies in governance. This is the complex task but the research results shows us warning that the market risk volatility might be higher during the post-low inflation period 2015-2017. And our conclusion part will recommend some policies and plans to deal with it.
Keywords: Risk management, asset beta, beta CAPM, financial crisis, medicine industry, macro policy
JEL classification numbers: G00, G390, C83.