Evaluating the effects of climate change, human capital, financial development, and renewable energy on agricultural production in Vietnam

Ngo Thai Hung1, Pham Tien Dung1, Lai Kim Hoang1, Vo Thuy Hang1, Vo Hong Son1
1 University of Finance – Marketing, Vietnam

Main Article Content

Abstract

This study aims to analyze how climate change, human capital, financial development, and renewable energy affect agricultural production in Vietnam during the period: 1995–2023, using wavelet analysis and spectral Granger causality. The results show that there is a significant relationship between climate change, human capital, financial development, renewable energy, and agricultural production over the sample period in Vietnam. More specifically, human capital, financial development, and renewable energy consumption positively influence agricultural production, while climate change has a negative impact on agricultural production. This means that human capital, financial development, and renewable energy remarkably enhance agricultural production, while climate change significantly reduces agricultural production. In addition, the spectral Granger causality test indicates that there is a bidirectional causality between these regressors and agricultural production in Vietnam across different frequencies. Climate change and financial development have a causal relationship with agricultural production in the short run. However, in the long run, we should pay attention to boosting the development of human resources and clean energy to achieve clean and sustainable agriculture in Vietnam. Furthermore, fiscal policies are able to support human capital, renewable energy, and decrease the level of climate change to promote agricultural production. The government should provide fair, transparent, and reliable long-term human capital policies, as well as incentives to attract private and foreign investment capital to participate in the growth of renewable energy.

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References

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