Vietnam’s Outward Foreign Direct Investment: Alignment with Environmental Policies and Pursuit of Carbon Neutrality Goals

Phung Thanh Quang ()
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Phung Thanh Quang: School of Banking and Finance, National Economics University, Hanoi, Vietnam

Journal of Environmental Assessment Policy and Management (JEAPM), 2025, vol. 27, issue 02, 1-18

Abstract: This study examines the impact of Outward Foreign Direct Investment (OFDI) on CO2 emissions in Vietnam (1991-2023) using the Autoregressive Distributed Lag (ARDL) model, an econometric approach designed to analyse both short-run and long-run relationships between variables with different integration orders. Results indicate OFDI has no statistically significant effect on emissions in either timeframe, with insignificant coefficients. While GDP per capita shows a negative long-run association — aligns with Vietnam’s 2021–2030 National Climate Strategy, which emphasizes promoting GDP growth through low-carbon sectors. Based on these findings, the author proposes policy reforms to align OFDI with climate goals, including green investment incentives and cross-border renewable energy partnerships.

Keywords: OFDI; environmental quality; carbon emissions; Vietnam; autoregressive distributed lag model (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S1464333225500061

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