This study investigates the relationship between Foreign Direct Investment (FDI), political stability, and coal efficiency in Vietnam using time series analysis from 1985 to 2021. Results indicate that political stability positively influences coal efficiency, encouraging investments in cleaner technologies. However, inward FDI exhibits negative impacts on coal efficiency, indicating limited contributions to greener projects. Moreover, a 1% increase in sustainable power generation significantly improves coal efficiency. To enhance coal efficiency, practical policies are needed, including fostering a stable political environment, incentivizing FDI in energy-efficient technologies, collaborating for technology transfer, investing in research and development, and promoting sustainable power generation. These strategies can aid Vietnam in reducing coal reliance and transitioning towards a more sustainable energy landscape.
