Are Exports More Responsive to Clean or Dirty Energy? The Case of Vietnam’s Exports to 54 Countries

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.

Keywords

• electricity generation
• renewables
• fossil fuel
• exports of goods
• Vietnam