Title: Outward Foreign Direct Investment, Carbon Emissions, and the Green Transition: Lessons from Turkey's Climate Policy for Vietnam
Authors: Bui Ngoc Tu
Volume: 10
Issue: 3
Pages: 1-6
Publication Date: 2026/03/28
Abstract:
The relationship between outward foreign direct investment (OFDI) and environmental quality has attracted growing scholarly attention, yet qualitative and case-based investigations - particularly in emerging economies - remain scarce. This paper adopts a qualitative multiple case study methodology to examine how Turkey's OFDI dynamics, corporate green transitions, and the implementation of Climate Law No. 7552 (2025) interact to shape carbon dioxide (CO?) emissions at firm and policy levels. Drawing on three embedded cases - Arçelik's global green expansion, Turkey's industrial zones under the pilot Emissions Trading System (ETS), and the role of trade in services in environmental decoupling - this paper synthesises key institutional mechanisms that either amplify or mitigate the carbon impact of OFDI. Turkey's experience is particularly instructive because it mirrors the developmental trajectory of Vietnam: both are rapidly industrialising, middle-income economies with rising OFDI, heavy reliance on fossil-fuel-intensive manufacturing, and recent commitments to Net Zero by mid-century. The findings identify three transferable policy lessons for Vietnam: (1) conditional green OFDI incentives linked to reverse technology transfer; (2) a phased ETS architecture aligned with EU Carbon Border Adjustment Mechanism (CBAM) obligations; and (3) a services-led growth strategy to structurally decouple economic expansion from emissions. These lessons offer actionable guidance for Vietnam's carbon market pilot (2025-2028) and its National Climate Strategy.