Effect of foreign direct investment inflows on urbanization in Vietnam: Does environmental regulation matter?

IF 2.9 3区经济学 Q1 ECONOMICS

Journal of Asian Economics Pub Date : 2024-12-31 DOI:10.1016/j.asieco.2024.101874

Quynh Anh Do , Rohan Best

{"title":"Effect of foreign direct investment inflows on urbanization in Vietnam: Does environmental regulation matter?","authors":"Quynh Anh Do , Rohan Best","doi":"10.1016/j.asieco.2024.101874","DOIUrl":null,"url":null,"abstract":"<div><div>This study uses provincial-level panel data containing 63 provinces over the period 2014–2021 in Vietnam to explore the role of foreign direct investment in urbanization in Vietnam, emphasizing the roles of environmental regulations as both a mediator and a moderator. To address the issue of endogeneity, the System Generalized Method of Moments (SGMM) estimators are employed in empirical estimations. The initial results show that lagged foreign direct investment (FDI) directly has a detrimental effect on the progress of urbanization. However, the indirect effects offer a more detailed perspective. Through its contributions to economic growth, FDI indirectly facilitates urbanization, showing that economic development stimulated by foreign investment can drive urban expansion. Environmental regulations, meanwhile, serve a dual purpose: as a mediator, they enable FDI to promote stricter environmental standards, which subsequently encourage urbanization; as a moderator, they enhance the positive influence of FDI on urbanization. The study suggests that in addition to FDI and environmental regulations, urbanization in Vietnam is promoted by higher economic development and human capital accumulation.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"97 ","pages":"Article 101874"},"PeriodicalIF":2.9000,"publicationDate":"2024-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Asian Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1049007824001696","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}

引用次数: 0

Abstract

This study uses provincial-level panel data containing 63 provinces over the period 2014–2021 in Vietnam to explore the role of foreign direct investment in urbanization in Vietnam, emphasizing the roles of environmental regulations as both a mediator and a moderator. To address the issue of endogeneity, the System Generalized Method of Moments (SGMM) estimators are employed in empirical estimations. The initial results show that lagged foreign direct investment (FDI) directly has a detrimental effect on the progress of urbanization. However, the indirect effects offer a more detailed perspective. Through its contributions to economic growth, FDI indirectly facilitates urbanization, showing that economic development stimulated by foreign investment can drive urban expansion. Environmental regulations, meanwhile, serve a dual purpose: as a mediator, they enable FDI to promote stricter environmental standards, which subsequently encourage urbanization; as a moderator, they enhance the positive influence of FDI on urbanization. The study suggests that in addition to FDI and environmental regulations, urbanization in Vietnam is promoted by higher economic development and human capital accumulation.

查看原文本刊更多论文

求助全文

约1分钟内获得全文求助全文

来源期刊

Journal of Asian Economics ECONOMICS-

CiteScore

4.70

自引率

9.40%

发文量

期刊介绍： The Journal of Asian Economics provides a forum for publication of increasingly growing research in Asian economic studies and a unique forum for continental Asian economic studies with focus on (i) special studies in adaptive innovation paradigms in Asian economic regimes, (ii) studies relative to unique dimensions of Asian economic development paradigm, as they are investigated by researchers, (iii) comparative studies of development paradigms in other developing continents, Latin America and Africa, (iv) the emerging new pattern of comparative advantages between Asian countries and the United States and North America.