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Impact of foreign direct investment and urbanisation on CO 2 emissions in Vietnam

Author

Listed:
  • Ho Thuy Ngoc
  • Bui Anh Tuan
  • Nguyen Van Duy
  • Dao Trung Kien
  • Nguyen Ngoc Dat

Abstract

Vietnam is considered one of the countries mostly affected by climate change due to CO2 emissions. Urbanisation and foreign direct investment have been argued to be main causes. This study examines the impact of foreign direct investment and urbanisation on CO2 emissions in Vietnam by applying the autoregressive distributed lag (ARDL) model, testing reliability and correcting model. The research data was collected from the World Bank's tracking database between 1985 and 2016. The causal relationship among variables shows the impacts in short run and long run are different. We find that the relation between urbanisation and CO2 emissions has changed from U-shaped in short-term with the optimal lag 2 into inverse U-shape in long-term. We realise that foreign direct investment is positively related to CO2 emission in short run while there is no such effect in the long run. Conclusions and policy implication for Vietnam are given accordingly.

Suggested Citation

  • Ho Thuy Ngoc & Bui Anh Tuan & Nguyen Van Duy & Dao Trung Kien & Nguyen Ngoc Dat, 2021. "Impact of foreign direct investment and urbanisation on CO 2 emissions in Vietnam," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 27(3), pages 313-332.
    • Handle: RePEc:ids:ijbglo:v:27:y:2021:i:3:p:313-332
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    Citations

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    Cited by:

    1. Chafic Bassam Saliba & Fida Ragheb Hassanein & Seyed Alireza Athari & Hazar Dördüncü & Ephraim Bonah Agyekum & Parise Adadi, 2022. "The Dynamic Impact of Renewable Energy and Economic Growth on CO 2 Emissions in China: Do Remittances and Technological Innovations Matter?," Sustainability, MDPI, vol. 14(21), pages 1-17, November.
    2. Dervis Kirikkaleli & Tomiwa Sunday Adebayo, 2024. "Political risk and environmental quality in Brazil: Role of green finance and green innovation," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1205-1218, April.
    3. Li, Jinlong & Shi, Yang & Song, Xiaowei, 2024. "The dynamics of digitalization and natural resources in shaping the sustainable development agenda in BRICS-T nations," Resources Policy, Elsevier, vol. 91(C).
    4. Wang, Zihan & Chen, Xi & Ullah, Sami & Abbas, Shujaat, 2023. "Resource curse or blessing? Evaluating the role of natural resource, social globalization, and environmental sustainability in China," Resources Policy, Elsevier, vol. 85(PA).
    5. Bouzayani Rajab & Abida Zouheir, 2024. "Complementarity Relationship Between Foreign Direct Investment, Human Capital Threshold and Economic Growth: State of the 15 Least Developed African Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7216-7236, June.

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