Gauging the level of time-varying interlinkages between environmental innovation and globalization in Vietnam
International Journal of Innovation Science
ISSN: 1757-2223
Article publication date: 30 October 2023
Abstract
Purpose
This study aims to examine connections between five variables, including innovation in environment-related technology (EI), trade openness (TRADE), CO2 emissions (CO2) and foreign direct investment (FDI) from 1994 to 2019.
Design/methodology/approach
This study used an extended joint connectedness technique and the time-varying parameter vector autoregression (TVP-VAR) method. The analysis focuses on the variables of innovation in environment-related technology (EI), trade openness (TRADE), CO2 emissions (CO2) and foreign direct investment (FDI) using data from 1994 to 2019.
Findings
The results demonstrate that innovation in environment-related technology and an openness to the global network captured by FDI are identified as crucial net transmitters of shocks. In addition, an openness to the global trade network captured by TRADE turns from a transmitter to a receiver of shocks and vice versa. Moreover, it can be seen that the impact of EI was significant in the first five years of the observed period, and it transmitted the largest shock in 1997.
Practical implications
With regard to policy implications, the findings offer valuable insights for investors and policymakers. As the tradeoff between business efficiency and environmental sustainability diminishes, it is essential for Vietnam’s economy and enterprises to embrace green and sustainable growth in line with global trends. In a world characterized by uncertainties and risks, enterprises need to develop strategies to manage risks and shocks arising from geopolitical tensions, input material supply, financial–monetary instability and natural disasters.
Originality/value
This study contributes to the existing literature in two significant ways. First, as previously emphasized, this paper represents the first attempt to investigate the relationship between economic globalization and environmental innovation. Second, this study proposes a novel methodology that is better suited for analyzing volatility interlinkages across different market types.
Keywords
Acknowledgements
This paper was supported by National Economics University.
Declaration of interests: The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
Ethics approval and consent to participate: Not applicable.
Consent for publication: Not applicable.
Compliance with Ethical Standards. • Disclosure of potential conflicts of interest • Research involving Human Participants and/or Animals • Informed consent
Data availability statement: Data available on request due to privacy/ethical restrictions.
Citation
Thanh Ha, L. (2023), "Gauging the level of time-varying interlinkages between environmental innovation and globalization in Vietnam", International Journal of Innovation Science, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJIS-05-2023-0118
Publisher
:Emerald Publishing Limited
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