Examining the Correlation among Economic Development, Foreign Direct Investment, and CO 2 Emissions by Utilizing the VECM Model—Empirical Study in Vietnam

Trang Tran, Thao Huong Phan (), Thao Viet Tran and Anh Tram Thi Le
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Thao Huong Phan: Accounting and Auditing Faculty, Thuong Mai University, Hanoi 10000, Vietnam
Thao Viet Tran: Department of Research Administration, Thuong Mai University, Hanoi 10000, Vietnam
Anh Tram Thi Le: Accounting and Auditing Faculty, Thuong Mai University, Hanoi 10000, Vietnam

Sustainability, 2022, vol. 14, issue 19, 1-15

Abstract: From 1990 to 2019, Vietnam entered a period of economic growth, attracting foreign investment. However, during this period, CO 2 emissions also increased significantly. This paper will examine the short- and long-term relations of Vietnam’s relationship among FDI, economic growth, and CO 2 emissions based on the data on CO 2 , GDP, and FDI of Vietnam in 1990–2019. This article uses the VECM model to test the effect among variables. Research results identify an impact and causal correlation among CO 2 emissions and economic growth and foreign direct investment in Vietnam. Research results show a long-term relationship between CO 2 emissions, GDP, and FDI. The authors did not find a short-run relationship between the above variables. Assessing impacts of CO 2 emissions on economic growth and foreign direct investment will help policymakers make reasonable policies to balance the increase in foreign investment capital and economic growth and reduce CO 2 to achieve the commitment in COP26.

Keywords: economic growth; foreign direct investment; CO 2 emission; VECM model; long-term impact (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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