Challenges and Opportunities from Impacts of FDI and Income on Environment Pollution: Role of Financial Accounting Transparency in FDI Firms
Volume 10, Issue 2 (2020), pp. 643–654
Hoang Thanh Hanh Bui Minh Chuyen Dinh Tran Ngoc Huy Nguyen Thi Thanh Phuong Hoang Thi Lan Phuong Le Ngoc Nuong
Pub. online: 30 December 2020 Type: Article Open Access
30 December 2020
30 December 2020
Transparency of financial accounting information in FDI firms will have certain impacts on enhancing responsibilities of FDI investments on society, income and environment. The research aimed to evaluate the association of disposable income and environmental pollution on the investments measured using FDI. The research was specific to the Vietnam compared to Indonesian economy. We use both qualitative and quantitative analysis. In Vietnam, qualitative analysis, synthesis, dialectical materialism and statistics explanation method were used. Then, The research was secondary quantitative and the data was accumulated from World Bank. The time frame considered for this study ranged from 1960 to 2018. For statistical analysis, descriptive statistics, stationarity testing, ARDL assessment and Granger Causality have been used. The results unveiled that both disposable income and environmental pollution are found to have significant effect on the FDI of Vietnam and Indonesia. Moreover, the higher transparency level of financial accounting information in FDI firms, the higher CSR in term of business environment and society for FDI firms. We also propose some recommendations for enhancing financial accounting information transparency in Vietnam. For instance, FDIs firms need to increase transparency in financial statements, internal and external investor financial accounting reports, income distribution, tax and stakeholder payment obligations, internal price transfer policy, etc. Lat bu not least, the research is limited to 2 above countries and no other country has been evaluated. Therefore, in future more countries can be considered for comparative analysis. In furtherance, more factors can be considered in future that affect Vietnam and Indonesian FDI.