Abstract
In this paper we examine the influence of clean (hydropower) or dirty (fossil fuel generated) energy on bilateral exports. We focus on bilateral exports from Vietnam, a developing nation with a fast-growing economy propelled by international trade, to her top 54 trading partners over the period 1986–2010. Our key results suggest that there is a significant, positive, and stable long-term relationship between electricity and exports, with some variations across the regional panels of the trading partners and electricity sources. Trading partners of Vietnam are sensitive to how electricity is generated. For trading partners from regions excluding low income Asia, bilateral exports respond more to renewables than fossil fuel generated electricity, which indicates that exports are sensitive to certain qualities of energy sources, namely reliability and price competitiveness.
Highlights
This paper investigates the role of clean and dirty energy in the export industries of Vietnam, a developing nation
This table summarises unit root test results relating to three energy variables in level form: total electricity generated in Vietnam (ELEC); total electricity generated in Vietnam using fossil fuels (FOSSIL); and total electricity generated in Vietnam from renewables (RENEW)
For fossil fuel generated electricity, we found that a mixture of hypotheses were satisfied, depending on the panel examined: the feedback hypothesis applies for trade with the high-income Asian, European, and full sample of trading partners; the neutral hypothesis applies for the Americas; and the growth hypothesis applies in the case of low-income Asian nations and Africa
Summary
This paper investigates the role of clean and dirty energy in the export industries of Vietnam, a developing nation. Exports have become an important driver of economic prosperity. In Vietnam, exports contributed 66.8% on average to its gross domestic product (GDP), becoming the most important driver of economic activity over the period 2000–2010 [1]. Economic prosperity has often come at the expense of environmental degradation, where energy generation has played a critical role. Export led growth has needed to be sustained by substantial increases in electricity generation. For developing nations, an understanding of the influence of clean versus dirty energy sources on their export industries is imperative to developing energy policies that reduce GHG emissions and promote economic growth
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