Impacts of Trade Liberalisation on CO2 Emissions in Vietnam

Mai T. T. Tran, Christopher Gan and Baiding Hu
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Mai T. T. Tran: Department of Financial and Business Systems, Faculty of Agribusiness and Commerce, Lincoln University, New Zealand
Christopher Gan: Department of Financial and Business Systems, Faculty of Agribusiness and Commerce, Lincoln University, New Zealand
Baiding Hu: Department of Financial and Business Systems, Faculty of Agribusiness and Commerce, Lincoln University, New Zealand

International Journal of Business and Economics, 2019, vol. 18, issue 3, 265-286

Abstract: This study examines the impact of economic development, trade openness, and energy usage on Vietnam’s CO2 emissions from 1985 to 2013 by applying an Auto-regression Distributed Lag (ARDL) model. The empirical results show a long-run relationship between economic development and CO2 emissions in Vietnam that can be expressed in an inverted U-curved function. Trade liberalization exhibits a positive impact on CO2 emissions, as a 1% increase in trade openness leads to a 0.191% increase in CO2 emissions for long-run elasticity. Furthermore, trade liberalisation has lag effects on CO2 emissions, which are estimated to reverse from negative to positive after a two year period. A 1% increase in energy usage leads to a 1.391% increase in CO2 emissions for long-run elasticity. Thus, environmental quality improves with cleaner technology and stricter regulations on environmental protection incorporated into international economics at the policy level in Vietnam.

Keywords: Trade openness; Energy consumption; CO2 emissions; Auto-regression distributed lag model; Vietnam. (search for similar items in EconPapers)
JEL-codes: C32 F15 F18 O53 Q56 (search for similar items in EconPapers)
Date: 2019
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