Growth, Fast Fashion, and Environmental Degradation in Vietnam: An Empirical Test of the EKC Hypothesis

Yoochan Hwang ()

International Journal of Economic Policy, 2025, vol. 5, issue 5, 1 - 27

Abstract: Purpose: The aim of this paper is to examine and evaluate whether the Environmental Kuznets Curve (EKC) hypothesis holds in Vietnam and how the expansion of fast fashion exports has influenced the income–environment relationship in Vietnam from 2000 to 2023. Methodology: This paper utilizes annual national data compiled from the World Bank, UN Comtrade, and the Worldwide Governance Indicators, with four indicators of environmental degradation analyzed: CO₂ emissions per capita, total greenhouse gas emissions per capita, PM2.5 concentrations, and industrial CO₂ emissions. Findings: The results of regression analysis show rejection of the EKC hypothesis in the context of Vietnam during the study period of 2000-2023 and highlight that economic growth alone has not led to environmental improvement. Instead, institutional capacity, regulatory enforcement, and targeted industrial and trade policies play a far stronger role in shaping outcomes. More importantly, alongside strengthening governance, it is critical to address high-emission sectors such as fast fashion, aligning with global climate goals. Unique Contribution to Theory, Practice and Policy: This study contributes to the literature by showing how economic growth, industry structure, and institutional context interact to improve environmental conditions in the developing country context. While industry structure can influence the EKC dynamics, as recent findings suggest, the institutional context, such as the quality of environmental regulation, can has a significant impact of environmental improvement.

Keywords: Fast Fashion; Environmental Kuznets Curve (EKC); Vietnam; Environmental Degradation; Trade and Sustainability (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bhx:ijecop:v:5:y:2025:i:5:p:1-27:id:3292

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