Revisiting the relationship between energy consumption and economic growth nexus in Vietnam: new evidence by asymmetric ARDL cointegration

ABSTRACT

Energy is an essential resource for economic development. The study employed the asymmetric ARDL cointegration approach to investigate the impact of energy consumption on economic growth for Vietnam during the period 1971-2017. The finding of the study is that the effects of electricity consumption on economic growth are asymmetric in both the short- and long-run, and the negative changes have a greater effect than the positive changes. At the same time, the impact of petroleum consumption on economic growth is asymmetric in the long-run, and the positive changes have a greater effect than the negative changes. The causality test also indicates the existence of bi-directional causality between energy consumption and economic growth, supported the Feedback hypothesis. Several policy implications are suggested from the obtained result findings.

KEYWORDS:

• Energy consumption
• economic growth
• asymmetric effect
• NARDL
• Vietnam

JEL CLASSIFICATION:

• F43
• O13
• O47
• Q42
• Q43

Acknowledgments

We thank Matthew Greenwood-Nimmo for the coding, anonymous reviewers, and Editor-in-chief for very useful comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This research is funded by Vietnam National Foundation for Science and Technology Development (NAFOSTED) under grant number [502.02-2019.321].