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Impacts of FDI and Environmental Pollution in ASEAN Countries: The Role of Institutions

Author

Listed:
  • Yen Nguyen

    (Faculty of Finance, Banking University of Ho Chi Minh City, Ho Chi Minh City, Vietnam)

  • Son Le

    (Banking University of Ho Chi Minh City, Ho Chi Minh City, Vietnam)

  • Nam Ngo

    (Faculty of Finance, Banking University of Ho Chi Minh City, Ho Chi Minh City, Vietnam)

  • Huyen Nguyen

    (Faculty of Finance, Banking University of Ho Chi Minh City, Ho Chi Minh City, Vietnam.)

Abstract

The study aims to examine the role of institutions in the relationship between foreign direct investment and environmental pollution in ASEAN countries from 2000 to 2019. With the General Moment method, the results show that foreign direct investment impacts increasing environmental pollution. At the same time, aspects of institutional quality such as the rule of law, government efficiency, political stability, quality regulations, and voice and accountability reduce environmental pollution. Furthermore, the study shows that institutional quality is essential in reducing the negative impact of foreign capital inflows on environmental pollution in ASEAN countries. From these results, the study recommends that ASEAN countries implement environmental protection plans when attracting foreign investment flows.

Suggested Citation

  • Yen Nguyen & Son Le & Nam Ngo & Huyen Nguyen, 2023. "Impacts of FDI and Environmental Pollution in ASEAN Countries: The Role of Institutions," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 242-250, September.
    • Handle: RePEc:eco:journ2:2023-05-29
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    More about this item

    Keywords

    FDI; Environmental pollution; Institutions; ASEAN; GMM;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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