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CO2 Emissions, Energy Consumption, Economic Growth and FDI in Vietnam

Author

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  • Dinh Hong Linh

    (Chung Yuan Christian University, Taiwan)

  • Shih-Mo Lin

    (Chung Yuan Christian University, Taiwan)

Abstract

This study examines the dynamic relationships between CO2 emissions, energy consumption, FDI and economic growth for Vietnam IN the period from 1980 to 2010 based on Environmental Kuznets Curve (EKC) approach, cointegration, and Granger causality tests. The empirical results do not support the EKC theory in Vietnam. However, the cointegration and Granger causality test results indicate a dynamic relationship among CO2 emissions, energy consumption, FDI and economic growth. The short run bidirectional relationship between Vietnam’s income and FDI inflows implies that the increase in Vietnam’s income will attract more capital from overseas. Inversely, FDI inflow is also driver of national income growth. The existence of bidirectional relationships in the long-run provides important policy implications. We recommend implementing a dual strategy of increasing investment in energy infrastructure and promulgating energy conservation policies to increase energy efficiency and reduce wastage of energy.

Suggested Citation

  • Dinh Hong Linh & Shih-Mo Lin, 2014. "CO2 Emissions, Energy Consumption, Economic Growth and FDI in Vietnam," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 12(3 (Fall)), pages 219-232.
    • Handle: RePEc:mgt:youmgt:v:12:y:2014:i:3:p:219-232
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    Cited by:

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    6. Sujan Chandra Paul & Md. Harun Or Rosid & Jyotirmay Biswas, 2021. "Impact of Energy and Natural Resources Rent on FDI: An Analysis through POLS, DK, 2SLS and GMM Models," Energy Economics Letters, Asian Economic and Social Society, vol. 8(2), pages 122-133, December.
    7. Sinha, Avik & Shahbaz, Muhammad & Sengupta, Tuhin, 2018. "Renewable Energy Policies and Contradictions in Causality: A case of Next 11 Countries," MPRA Paper 87542, University Library of Munich, Germany, revised 17 Jun 2018.
    8. Demena, Binyam Afewerk & Afesorgbor, Sylvanus Kwaku, 2020. "The effect of FDI on environmental emissions: Evidence from a meta-analysis," Energy Policy, Elsevier, vol. 138(C).
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    10. Ngo Ngoc Minh, 2020. "Foreign Direct Investment and Carbon Dioxide Emissions: Evidence from Capital of Vietnam," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 76-83.
    11. Khadiga Mohamed El-Aasar & Shaimaa A. Hanafy, 2018. "Investigating the Environmental Kuznets Curve Hypothesis in Egypt: The Role of Renewable Energy and Trade in Mitigating GHGs," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 177-184.
    12. Hlalefang Khobai & Pierre Le Roux, 2017. "The Relationship between Energy Consumption, Economic Growth and Carbon Dioxide Emission: The Case of South Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 7(3), pages 102-109.
    13. Shang, Yunfeng & Han, Ding & Gozgor, Giray & Mahalik, Mantu Kumar & Sahoo, Bimal Kishore, 2022. "The impact of climate policy uncertainty on renewable and non-renewable energy demand in the United States," Renewable Energy, Elsevier, vol. 197(C), pages 654-667.
    14. Shahbaz, Muhammad & Haouas, Ilham & Hoang, Thi Hong Van, 2019. "Economic growth and environmental degradation in Vietnam: Is the environmental Kuznets curve a complete picture?," Emerging Markets Review, Elsevier, vol. 38(C), pages 197-218.
    15. Haibo Sun & Zhonglu Liu & Yingchao Chen, 2020. "Foreign direct investment and manufacturing pollution emissions: A perspective from heterogeneous environmental regulation," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1376-1387, September.
    16. repec:vul:omefvu:v:9:y:2017:i:2:id:236 is not listed on IDEAS
    17. Hlalefang Khobai & Sanderson Abel & Pierre Le Roux, 2016. "Co-integration between Electricity Supply and Economic Growth in South Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 637-645.
    18. Tiago Sequeira & Liliana Reis (ed.), 2019. "Climate Change and Global Development," Contributions to Economics, Springer, number 978-3-030-02662-2, December.
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    20. Phuong Thao Dang, 2019. "Sustainability comes from within: carbon dioxide emissions, FDI origin factor and institutional qualities in developing countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(2), pages 439-471, July.
    21. Mehman Karimov, 2020. "An Empirical Analysis of the Relationship among Foreign Direct Investment, Gross Domestic Product, CO2 Emissions, Renewable Energy Contribution in the context of the Environmental Kuznets Curve and Po," European Journal of Engineering and Formal Sciences Articles, European Center for Science Education and Research, vol. 4, January -.

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    More about this item

    Keywords

    EKC; Cointegration; Granger Causality; pollution heaven; Vietnam’s CO2 emissions; Vietnam’s Energy consumption; FDI inflows; income;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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