Assessment of Impacts of Inward and Outward FDIs on Environmental Protection in Vietnam

Abstract

Considering two theories of Halo and Haven and annual data from 1994 to 2021 for the country of Vietnam, this paper has tried to consider two types of foreign direct investment (to Vietnam from abroad and from Vietnam to abroad) to study the impact factor of investment on carbon dioxide emissions in this country. The significant findings reveal that FDI (Foreign Direct Investment), both inward and outward, is an efficient factor in mitigating carbon emissions in the short term in Vietnam. The enhancements in the inward and outward flows of FDI in Vietnam will likely lead to a reduction in carbon emission increase which is in line with the environmental protection policy. In addition, it confirms the Halo pollution hypothesis in Vietnam, meaning that the Vietnamese government can mitigate CO2 emissions by improving FDI flows (both inward and outward).