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Pollution, energy use, GDP and trade: estimating the long-run relationship for Vietnam

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  • Sajid Anwar
  • W. Robert J. Alexander

Abstract

Since the beginning of economic reform in the 1980s and, in particular, with its openness to international trade accelerating since the 1990s, the Vietnamese economy has registered significant growth. At the same time, energy consumption and the level of pollution in Vietnam has also increased. This article aims to focus on the link between openness to trade and pollution in Vietnam. Due to lack of data, very few existing studies have focused on Vietnam. Using annual data from1980 to 2011 and employing the bounds testing approach to cointegration, based on an autoregressive distributed lagged (ARDL) model, we find that there is a statistically significant long-run relationship amongst pollution, openness to trade, energy consumption and real national income in Vietnam. This conclusion continues to hold when the possibility of a structural break in the relationship is allowed for using the Gregory-Hansen approach to cointegration. Analysis of the cointegration relationship suggests that, in response to any exogenous shock to the system, adjustment back to the long-run equilibrium is very fast.

Suggested Citation

  • Sajid Anwar & W. Robert J. Alexander, 2016. "Pollution, energy use, GDP and trade: estimating the long-run relationship for Vietnam," Applied Economics, Taylor & Francis Journals, vol. 48(53), pages 5221-5232, November.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:53:p:5221-5232
    DOI: 10.1080/00036846.2016.1173182
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    References listed on IDEAS

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    1. Dang, Vinh & Do, Trang & Nguyen, Cuong & Phung, Thu & Phung, Tung, 2013. "Economic Development, Inequality and Climate Change in Vietnam," MPRA Paper 54190, University Library of Munich, Germany.
    2. Martin Rama, 2008. "Making Difficult Choices," World Bank Publications - Books, The World Bank Group, number 28014, December.
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    Cited by:

    1. Mai T. T. Tran & Christopher Gan & Baiding Hu, 2019. "Impacts of Trade Liberalisation on CO2 Emissions in Vietnam," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 18(3), pages 265-286, December.
    2. Li, He & Lu, Juan, 2021. "Can stable environmental protection officials’ tenure reduce illegal emissions?," Socio-Economic Planning Sciences, Elsevier, vol. 78(C).
    3. Partha Gangopadhyay & Baljeet Singh, 2017. "CFCs and Rising Global Temperature During 1969-1998: A Time Series Analysis," Modern Applied Science, Canadian Center of Science and Education, vol. 11(8), pages 1-68, August.
    4. Anwar, Sajid & Nguyen, Lan Phi, 2018. "Channels of monetary policy transmission in Vietnam," Journal of Policy Modeling, Elsevier, vol. 40(4), pages 709-729.
    5. Apergis, Nicholas & Gangopadhyay, Partha, 2020. "The asymmetric relationships between pollution, energy use and oil prices in Vietnam: Some behavioural implications for energy policy-making," Energy Policy, Elsevier, vol. 140(C).

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