Do foreign direct investment and trade openness matter for environmental sustainability in Vietnam? Evidence from time-frequency analysis

Effective management of natural resources is not merely a choice but a critical responsibility for ensuring sustainability for future generations. This issue attracts significant attention from governments, regulatory agencies, environmental researchers, and the public. This study investigates the impact of key macroeconomic factors on natural resources in Vietnam and explores the lessons derived from these impacts. Utilizing Wavelet tools for the period from 1985 to 2021, the findings are summarized as: (i) Foreign direct investment (FDI) plays a vital role in diminishing Vietnam's economic reliance on natural resources; (ii) Trade openness exhibits a negative correlation with natural resource availability; (iii) Promoting economic growth may impede the regeneration of biocapacity. Based on the findings, we recommend that the Government strengthen public oversight and enhance local government monitoring during the operational phases of FDI ventures. Additionally, Vietnam should consider reducing the export of raw materials to preserve its natural resources for the benefit of future generations.