Decomposed and partial connectedness between economic globalization, non-renewable and renewable energy consumption in Vietnam

Le Thanh Ha, Manh-Hung Hung () and Le van Chon
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Le Thanh Ha: NEU - National Economics University (Ha Noi, Vietnam)
Manh-Hung Hung: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Le van Chon: Vietnam National University of Hochiminh City - HCMUT - Ho Chi Minh City University of Technology [Vietnam National University, HCM] - VNU-HCM - Vietnam National University, Ho Chi Minh City / Đại học Quốc gia TP. Hồ Chí Minh

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Abstract: In this study, we use a time-varying parameter vector autoregression (TVP-VAR) in conjunction with the extended joint connectedness approach to examine the influences of the economic globalization measured by foreign direct investment (FDI) as well as trade openness (TO), on renewable and non-renewable energy consumption, by characterizing the connectedness of these variables, from 1987 to 2020 in Vietnam. Our results demonstrate that abolishing the state monopoly in foreign trade influences the system-wide dynamic connectedness of trade openness, which peaked in 1989. Net total directional connectedness of FDI and energy consumption suggests that both the consumption of renewable and non-renewable energy consistently act as net contagion shock receivers, and FDI is a critical net transmitter the whole time. Trade openness behaves consistently as a critical net shock transmitter in 1989 but turned into an essential net receiver from 1990 to 2020. In a system with trade openness, the consumption of non-renewable energy consistently acts as a net contagion shock receiver, and renewable energy consumption is a critical net transmitter in the whole sample. Pairwise connectedness reveals that FDI consistently appears as a shock transmitter to renewable and non-renewable energy consumption. Trade openness could be either a transmitter or a receiver of shock from non-renewable energy, depending on the period, and is a net receiver of shocks from renewable energy consumption during our sample. The findings of this paper are critical for Vietnam's government to make a greater contribution to the expansion of global commerce and a sustainable environment.

Keywords: TVP-VAR; FDI and trade; Consumption of non-renewable and renewable energy; CO2 emission; Economic globalization (search for similar items in EconPapers)
Date: 2023-01-26
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Citations: View citations in EconPapers (4)

Published in Environmental Science and Pollution Research, 2023, ⟨10.1007/s11356-023-25158-7⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04044412

DOI: 10.1007/s11356-023-25158-7

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