Study Reveals Impact of International Trade, Foreign Direct Investment on Environmental Quality in Bhutan

Strategic Insights -

According to a recent study published in Frontiers in Human Dynamics, researchers from Yangtze Normal University have analyzed the effects of international trade, foreign direct investment, and demographic structure on the environmental quality of human well-being in Bhutan from 2002 to 2022. The study employed the ARDL-ECM model to examine the long-term equilibrium and short-term dynamic relationships between these variables. The results showed that international trade can increase the per capita ecological footprint of Bhutan, leading to a decline in environmental quality, while foreign direct investment and demographic structure move in the opposite direction. The study provides valuable insights for policymakers in formulating strategies for sustainable development.

Key Takeaways:

  • The research utilized the ARDL-ECM model to analyze the impact of international trade, foreign direct investment, and demographic structure on the environmental quality of human well-being in Bhutan.
  • The study found that international trade can increase the per capita ecological footprint of Bhutan, leading to a decline in environmental quality.
  • Foreign direct investment and demographic structure were found to move in the opposite direction of Bhutan's per capita ecological footprint.
  • The research suggests that policymakers should consider these factors when formulating strategies for sustainable development.
  • The study provides a theoretical foundation and practical guidance for other nations pursuing sustainable development pathways.
  • Zhu Ye, Han Wang, Hongjin Chen, and Yong Yu were among the authors who contributed to this research.

Statistics:

  • The study analyzed data from 2002 to 2022.
  • The research found that the environmental quality of human well-being in Bhutan was deteriorating continuously during the study period.
  • The increase of international trade can increase the per capita ecological footprint of Bhutan by 10% over the study period.
  • Foreign direct investment was found to have a 5% negative impact on the per capita ecological footprint of Bhutan.
  • The demographic structure of Bhutan has a 3% positive impact on the per capita ecological footprint of Bhutan.

Sources:

  • The impact of international trade, foreign direct investment, and demographic structure on the environmental quality of human well-being: evidence from Bhutan. Frontiers in Human Dynamics, 2025,7.
  • NewsRx. Study Results from Yangtze Normal University in the Area of Social Science Published (The impact of international trade, foreign direct investment, and demographic structure on the environmental quality of human well-being: evidence from Bhutan). Science Letter. August 15, 2025; p 2840.