Original scientific paper
https://doi.org/10.13044/j.sdewes.d13.0594
Asymmetric Effects of Financial Development, Energy Consumption, and Foreign Direct Investment on Carbon Dioxide Emission in Vietnam
Thanh Phuc Nguyen
; Van Lang University, Ho Chi Minh City, Vietnam
Trang Thi-Thuy Duong
; University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam
Dinh Van Hoang
orcid.org/0000-0002-7902-0631
; Foreign Trade University, Hanoi, Vietnam
Tran Thai Ha Nguyen
orcid.org/0000-0003-2598-3720
; Khon Kaen University, Khon Kaen, Thailand
Abstract
This study investigates the asymmetric effects of financial development, energy consumption, and foreign direct investment on carbon dioxide emissions in Vietnam from 1990 to 2021 by employing a nonlinear autoregressive distributed lag. The findings reveal complex and asymmetric relationships in both the short and long term. In the long term, carbon dioxide increases with positive shocks in financial and economic growth, and negative shocks in energy consumption. Conversely, these emissions decrease with negative shocks in financial development and positive shocks in foreign direct investment. Short-term results also show that financial development significantly promotes carbon emissions. Although energy consumption shocks initially reduce these emissions, they later increase them. Notably, positive foreign direct investment shocks were found to reduce carbon dioxide emissions in the short term. These findings emphasise the need for policies that balance economic development, energy use, foreign investment attraction, and environmental protection in a developing economy.
Keywords
Financial development; Energy consumption; Foreign direct investment; Carbon emissions; NARDL; Vietnam
Hrčak ID:
335150
URI
Publication date:
5.12.2025.
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