STATE BANK OF VIETNAM BANKING ACADEMY OF VIETNAM FACULTY OF INTERNATIONAL BUSINESS ---------- GRADUATION THESIS TOPIC HOW CAN ENVIRONMENTAL SUSTAINABILITY AFFECT HIGH-TECHNOLOGY EXPORTS: INTERNATIONAL EVIDENCE AND POLICY IMPLICATIONS FOR VIETNAM Student : Nguyen Thuy Linh Class : K22KDQTD Student code : 22A4050016 Supervisor : PhD. Pham Duc Anh Ha Noi, 06th May 2024 STATE BANK OF VIETNAM BANKING ACADEMY OF VIETNAM FACULTY OF INTERNATIONAL BUSINESS ---------- GRADUATION THESIS TOPIC HOW CAN ENVIRONMENTAL SUSTAINABILITY AFFECT HIGH-TECHNOLOGY EXPORTS: INTERNATIONAL EVIDENCE AND POLICY IMPLICATIONS FOR VIETNAM Student : Nguyen Thuy Linh Class : K22KDQTD Student code : 22A4050016 Supervisor : PhD. Pham Duc Anh Ha Noi, 06th May 2024 PROTEST I hereby declare that the content of the graduation thesis "How can environmental sustainability affect high-technology exports: International evidence and policy implications for Vietnam" is my own research. The thesis was conducted openly, based on personal efforts and dedicated guidance from PhD.
Pham Duc Anh - Lecturer of Research Institute, Banking Academy. The content and research results in the graduation thesis are neutral, authentic with reliable data, and do not copy previous topics. The topic has references and research articles are mentioned in the reference list. I take full responsibility for the content of my thesis.
The person who promised Nguyen Thuy Linh ACKNOWLEDGEMENT During my four years studying at the Banking Academy, I would like to express my deep gratitude to the lecturers, especially the teachers of the Faculty of International Business, who spent their time and effort to guide and support me during the learning process. It is impossible not to mention the support of friends and relatives, as well as the valuable contribution of PhD. Pham Duc Anh, who accompanied and helped me complete this thesis. I completed this thesis by my own efforts, however, my knowledge and understanding are still limited and the research time is not too long, it will be difficult to avoid shortcomings and limitations in the research.
I hope to receive sincere contributions from teachers so that I can improve my knowledge and complete my research better. Wishing all teachers good health and success in their careers and lives. Thank you sincerely! Student Nguyen Thuy Linh TABLE OF CONTENTS INTRODUCTION. 1 CHAPTER 1: THEORETICAL FRAMEWORK ON THE RELATIONSHIP BETWEEN ENVIRONMENTAL SUSTAINABILITY AND HIGH TECHNOLOGY EXPORTS.
Overview of exports. Overview of high-technology exports. Environmental quality and sustainability. The environmental sustainability and high-technology exports nexus.
25 CHAPTER 2: RESEARCH METHODOLOGY AND DATA SAMPLING. Research model and hypothesis development. Overview of research models about the impact of environmental sustainability on high-technology exports. Research model and hypothesis.
38 CHAPTER 3: ECONOMETRIC RESULTS OF THE RESEARCH MODEL INVESTIGATING THE RELATIONSHIP BETWEEN ENVIRONMENTAL SUSTAINABILITY AND HIGH TECHNOLOGY EXPORTS. Estimation results of the effect of environmental sustainability on high- technology exports. Discussion of research findings. Cross-sectional dependence.
Regressions using instrumental variables. 50 CHAPTER 4: CONCLUSION AND POLICY IMPLICATIONS TO IMPROVE ENVIRONMENTAL EFFICIENCY AND INCREASE THE EXPORT OF GREENER HIGH-TECHNOLOGICAL CONTENT PRODUCTS IN VIETNAM WITH OTHER RESEARCHED REGIONS. Current status of environmental performance and export situation of high- tech products in Vietnam. Environmental performance: Air quality.
Vietnam's high-tech product exports situation. Trade and industrial policy implications to improve environmental efficiency and upgrade eco-friendly export technology-intensive commodities between Vietnam and other areas.62 LIST OF ABBREVIATIONS ABBREVIATIONS ORIGINAL ENGLISH MEANING AQI Air Quality Index EPA US Environment Protection Agency EPI Environmental Performance Index R&D Research and Development FDI Foreign Direct Investment FEM Fixed Effect Model RE Random Effect GLS Generalized Least Squares GMM Generalized Method of Moments OLS Ordinary Least Squares GDP Gross Domestic Product WB World Bank WDI World Development Indicators 2SLS Two Stage Least Square IV Instrumental Variables GFN Global Footprint Network EF Ecological Footprint IEA International Energy Agency WTO World Trade Organization LIST OF TABLES NUMBER TABLE PAGE Table 1 Overview of studies on the relationship between 3 environmental quality and high-technology exports Table 1.1 AQI assessment and medical alert level 20 Table 2.1 Variable descriptions of model (1) 31 Table 2.2 Description and source variables 33 Table 3.1 Descriptive Statistics 39 Table 3.2 Pairwise correlations matrix 40 Table 3.3 Multivariate analysis 41 Table 3.4 The persistence of the impact in middle-income 46 countries Table 3.5 Fixed effect regression with Driscoll and Kraay (1998) 47 standard errors Table 3.6 Instrumental variable regression results 48 Table 4.1 Export markets for phones and components in 2022 55 Table 4.2 Export markets for computers, electronic products and 55 components in 2022 LIST OF FIGURES NUMBER FIGURE PAGE Figure 1.1 2022 EPI Framework 18 Figure 2.1 Mechanism of interaction between factors 30 Figure 4.1 Air quality (EPI) of Vietnam in the period 2010- 52 2022 Figure 4.2 Export turnover of Vietnam’s 5 largest export 54 products in the period 2010-2022 INTRODUCTION 1. Rationale of the study Over time, humanity has increasingly degraded the natural environment to fulfill its needs, with air pollution emerging as a significant threat to both the environment and quality of human life. According to the World Health Organization (WHO), air pollution has been linked to various adverse health effects, including respiratory issues, heart disease, lung cancer, and premature death.
These impacts stem from both direct exposure and indirect mechanisms such as oxidative stress and inflammation in the lungs. Furthermore, global carbon dioxide (CO2) emissions have tripled in the past two decades due to economic growth (Chen et al. Governments worldwide have responded by positively implementing environmental regulations (Khalid et al. 2020), with an emphasis on incorporating environmental considerations into trade policies (Baghdadi et al.
2013; Usman et al. This trend underscores the importance of indicators like the Environmental Performance Index (EPI) in assessing countries' efforts to protect the environment and enhance quality of life for their populations. In today's global landscape, nations are increasingly prioritizing environmental concerns and incorporating sustainable development objectives into their national agendas. Consequently, there is a rising trend in international trade initiatives emphasizing environmentally friendly practices, often referred to as "green" trade promotion.
This has spurred numerous scholars worldwide to investigate the influence of various factors on environmental well-being. However, a pivotal question remains unanswered: does the level of environmental sustainability significantly impact the export, especially exports of high-tech goods? Addressing this query necessitates a thorough examination of the relationship between environmental sustainability, particularly air quality, and the export dynamics of the high-tech manufacturing sector. Hence, the author has opted to delve into this topic with the study titled "Can environmental sustainability affect high-tech exports: International evidence and policy implications for Vietnam," aiming to provide deeper insights into this matter. Literature review 1 Ensuring a strong export capacity is pivotal for sustaining long-term economic growth.
To achieve this goal, technological sophistication of exports is crucial, making it imperative to identify the key drivers involved. Accordingly, Tebaldi (2011) conducted multiple regression analyses using panel data encompassing economically and geographically heterogeneous countries. Examining the dynamics of high-tech exports over the period 1980-2008, Tebaldi found evidence proving that the quality of human capital, foreign direct investment, and the country's openness to international trade are decisive factors influencing the export value of high- technology industrial products. A similar method was also applied by Sandu & Ciocanel (2014) to demonstrate a positive correlation between Research and Development expenditures and the level of high-tech exports among European Union countries.
Additionally, because it promotes the country's access to new information, a country's level of digitalization is also a contributing factor to the export of high- tech products, which is pronounced in developing countries (Özsoy et al. Likewise, employing GMM and GLS research methodologies, Zapata et al. (2023) continue to investigate the determinants of enhanced technology content in exports across 35 OECD member countries. The estimation outcomes reveal that variables such as physical capital, innovation, imports of high-tech manufactured goods, population size, and EU membership play an important role and are positively associated with the export of technology-intensive manufactured products.
From a cross-cultural perspective, Malik et al. (2021) conducted fixed-effects regressions in more than 100 countries over 21 years. They came to the conclusion that the national patent transformation level significantly and positively influences the export performance of high-tech products in the long run. In the current context when countries promote economic development associated with comprehensive sustainability goals, the state of the national environment needs to be regarded as a determinant of high-tech products quality.
However, the link between environmental quality and high-tech exports remains relatively unexplored. There are only a few studies with narrow scopes, identifying short-term negative effects of environmental regulations on export trade (Qiang et al. The authors found that this relationship will shift from inhibiting to 2 promoting exports in the long term due to government promotion. In general, the number of studies on the interaction between environmental sustainability and the export efficiency of products with high technology content at the macro level is not much.
Economists and environmentalists focus on groups of countries that are developed or have high levels of investment. Research targeting groups of developing economies or specific geographical areas is still limited. Therefore, the author selected a sample of countries in seven geographical regions: East Asia & Pacific, Europe & Central Asia, Latin America & Caribbean, Middle East & North Africa, North America, South Asia, and Sub-Saharan Africa to assess the impact of environmental quality on high-tech product exports. At the same time, the study aims to provide analysis and recommend several policies to improve environmental performance and promote the export of environmentally friendly high-tech products in the region, including Vietnam.
Table 1: Overview of studies on the relationship between environmental sustainability and high-technology exports Article Research Data period Methodology Variables Key conclusion country analyzed Tebaldi 217 1980 - 2008 Multiple High-tech exports, ↑ human capital → (2011) countries regression human capital, ↑High-tech exports; according trade openness, ↑trade openness → to WDI FDI, investments ↑High-tech exports; in physical capital, ↑FDI → ↑High- exchange rates, tech exports macroeconomic volatility, migration, Gross domestic savings - % of GDP, Inflation, GDP deflator (annual) 3 Sandu & 26 EU 2006 - 2010 Multiple LF, EXPRI, ↑LF, EXPRI, Ciocanel countries, linear EXPRP, EXP EXPRP → ↑EXP (2014) except for regression, (26 EU countries, Luxembour Pooled EGLS EXPRI, except for g, all 27 GOVRD_(-5), Luxembourg); EU HIGH_ ↑EXPRI, countries GOVRD_(-5) → ↑HIGH_ (all 27 EU countries) Özsoy et 122 2007 - 2017 GMM Highex, IDI, ↑ IDI → ↑ Highex; al. countries Access, Usage, ↑Access → ↑ (2021) (32 Skill Highex; developed ↑Usage → countries ↑Highex; and 90 ↑Skill → ↑Highex developing countries) Malik et 101 21 years OLS, FE, RE high-tech exports, ↑GDP per capita → al. countries GDP, military ↑high-tech exports; (2021) expenditures, ↑ Common civil openness, patents, law → ↑high-tech PDI, IDV, MAS, exports; UAI, LTO ↑Military Exp → ↑high-tech exports; ↑Openness → ↑high-tech exports; ↑Patents → ↓high- tech exports; ↑PDI → ↑ (NAC, 4 EXP); ↑IDV → ↑ (NAC, EXP); ↑MAS → ↑ (NAC, EXP) Qiang et 30 2008 - 2017 Quantile EXP, ER, FDI, ER, FDI, GDP, al. provinces regression, GDP, R&D, TFP R&D, TFP → EXP (2021) of China IV/2SLS Zapata et 35 OECD 2004 - 2018 GLS, GMM XHIGH, GFCF, ↑GFCF → al.
countries LAND, ↑XHIGH; (2023) UNIVERSITY, ↑UNIVERSITY → R&D, FDI, ↑XHIGH; IMPORTS, POP, ↑R&D → INSTITUTIONAL ↑XHIGH; , EUROPE ↑FDI → ↑XHIGH; ↑IMPORTS → ↑XHIGH; ↑POP → ↑XHIGH 3. General research goals The thesis aims to investigate the connection between environmental quality and high-tech product exports across seven global regions. By implementing comprehensive assessments and analyses, it will provide policy recommendations to enhance environmental performance and level of eco sustainability, thereby promoting a more environmentally friendly growth in high-tech product exports. Specific tasks First, the article delivers a theoretical framework that links sustainable environmental development with exports of technology-intensive products.
Second, the thesis evaluates the relationship between the level of environmental development and high-tech exports volume using data from seven 5 regions over 15 years.