Foreign Direct Investment and Carbon Dioxide Emissions: Evidence From Capital of Vietnam

Abstract

The purpose of this paper is to investigate the relationship between carbon dioxide (CO 2 ) emissions, foreign direct investment (FDI), income per capita and energy consumption (EC) in the capital of Vietnam from 1990 to 2015. The empirical results indicate that EC is a major contributor of environmental degradation while FDI marginally contribute to the current status. Moreover, a one-way causality is found to be running from carbon dioxide (CO 2 ) emissions, EC, FDI to income in the long-run. Then, the new empirical findings suggest that municipal government should make urgent regulations to drastically the EC especially for private cars and motorbikes to improve environmental quality in Hanoi.

Foreign Direct Investment and Environmental Quality: Revisiting the EKC in Latin American Countries

“…The study by Lau et al [55] supported the evidence from Balibey [54] regarding a two-way causality between CO 2 emissions and FDI. The results of Lau et al [55] are similar to the findings of Minh [57] for Vietnam (1990Vietnam ( -2015, which, through ARDL models, concluded that the FDI contributes marginally to environmental degradation, in the short and long term. Nevertheless, they are contradictory to findings for Vietnam [57], with a similar methodology, Phuong and Tuyen [58] did not find statistically significant evidence to conclude that the FDI has an impact on environmental pollution.…”

“…The results of Lau et al [55] are similar to the findings of Minh [57] for Vietnam (1990Vietnam ( -2015, which, through ARDL models, concluded that the FDI contributes marginally to environmental degradation, in the short and long term. Nevertheless, they are contradictory to findings for Vietnam [57], with a similar methodology, Phuong and Tuyen [58] did not find statistically significant evidence to conclude that the FDI has an impact on environmental pollution. In a similar context, for Singapore, estimated long-term elasticities (through ARDL models) [59] showed that FDI inflows not only lead to higher economic growth, but also better environmental quality.…”

The link between urbanization, energy consumption, foreign direct investments and CO2 emanations: An empirical evidence from the emerging seven (E7) countries

“…Some FDI inflows are linked to high polluting items that surge the emanation of CO 2 in host nations. This supports the pollution haven hypothesis (Minh, 2020). Exudations of CO 2 are also being abated by some FDI technologies concurring with the pollution hallo hypothesis (Sarkodie and Strezov).…”

“…On the OECD region, Ahmad et al (2020) carried out an investigative study and confirmed FDI as a vital promoter of CO 2 secretions. This finding supports that of Li et al (2020a) and Minh (2020) for Vietnam, but contradicts that of Huang et al (2019) for Chinese provinces. These conflicting revelations suggests that the debate on the connection between FDI and the emanation of CO 2 is far from over and demanded for further explorations like ours.…”

“…This revelation is very relevant, however, the fact that the investigation was limited to only Chinese provinces implies, the generalization of its findings for all countries is appropriate, because if other provinces, regions and counties in other jurisdictions were to be included in the study, the outcome might show a different picture. Minh (2020) undertook a study on Vietnam, and established FDI as a key contributor of CO 2 effusions. Though this exploration is insightful, the interpretation of its finding warrants some caution, because it adopted the time series approach.…”