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

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.

Automated summary

The study found that the impact of energy consumption on economic growth in Vietnam is asymmetric, with negative changes in electricity consumption having a greater effect than positive changes, while positive changes in petroleum consumption have a greater effect than negative changes. Additionally, the bi-directional causality between energy consumption and economic growth supports the Feedback hypothesis.