Foreign direct investment and the current environmental situation: Evidence from Binh Duong, Vietnam

The main objective of this study is to investigate what makes the difference in the impact of FDI on environmental pollution according to the effect of the "pollution halo" and “pollution haven” hypotheses, and the current status of FDI and environmental pollution in Binh Duong province. We applied the document analysis, systematic review method of Bryman & Bell (2011), and the descriptive statistical method. The secondary data includes Binh Duong's FDI capital and environmental pollution indicators during the period from 2021 to 2023. The findings indicate that the “pollution halo” effect is primarily influenced by the influx of FDI capital from developed countries and the presence of high-quality FDI capital. Besides, the host country's environmental policy is an important factor in minimizing the environmental pollution. A significant portion of FDI comes from developing countries and a decline in FDI quality is occurring in the study area. Furthermore, the indicators related to environmental pollution are also increasing locally. This is an extremely worrying issue because it has a high potential risk of causing environmental pollution according to the “pollution haven” hypothesis. Governments at all levels should develop appropriate policies to create favorable conditions for the simultaneous development of an industrial structure towards high technology and automation, while promoting a favorable environment for foreign investors.