Vietnam has achieved impressive economic growth principally supported by foreign direct investment (FDI) in the last three decades. However, environmental deterioration is observed. No studies have ever been conducted to examine the link between economic growth and environmental degradation, focusing on the important role of the FDI, in Vietnam in both short run and long run. Using the ARDL and the threshold regression techniques for 35 years from 1986, Vietnam's "Doi Moi" (economic renovation), the U-shaped relationship between economic growth and the environmental quality is found in the long run and at the upper threshold of economic growth. FDI in the long run and at the upper threshold of economic growth also leads to further deterioration of the environmental quality. Also, consumption of fossil fuel energy deteriorates the environment in the long run, and at any level of economic growth. These findings simply mean that Vietnam has to adopt a new growth model with the focus on the quality FDI projects and clean energy sources to achieve the dual objectives: (i) sustained economic growth and (ii) improved environmental quality.
The current literature has generally considered prices of the agricultural commodity as an endogenous factor to crude oil price. As such, the role of the agricultural market in the energy sector has been largely ignored. We argue that the expansion of agricultural production may trigger a significant increase in oil price. In addition, the world has recently witnessed a growth in biofuel production, leading to an increase in the size of the agricultural sector. This study is conducted to examine the impact of different agricultural shocks on the oil and agricultural markets in the US for the period from 1986 to 2018. The study utilizes the Structural Vector Autoregressive (SVAR) model to estimate the relationship between the agricultural market and the crude oil market. Moreover, the variance decomposition is also used to quantify the contribution of agricultural demand shocks on oil price variations. Findings from this paper indicate that different agricultural shocks can have different effects on oil price and that corn use in ethanol plays an important role in the impact of corn demand shocks on oil price. We find evidence that the agricultural market can have an impact on oil prices through two main channels: indirect cost push effect and direct biofuel effect. Of these, the biofuel channel unexpectedly suggests that the expansion of bioethanol may in fact foster the dependency of the economy on fossil fuel use and prices.
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