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The role of trade and FDI for CO2 emissions in Turkey: Nonlinear relationships

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  • Haug, Alfred A.
  • Ucal, Meltem

Abstract

This paper examines the effects of foreign trade and foreign direct investment (FDI) on CO2 emissions in Turkey. We consider linear and nonlinear ARDL models and find significant asymmetric effects of exports, imports and FDI on CO2 emissions per capita. However, FDI has no statistically significant long-run effects. In the long run, decreases in exports reduce CO2 emissions per capita but increases in exports have no statistically significant effects. Increases in imports push up CO2 emissions per capita, while decreases in imports have no long-run effects. On the other hand, CO2 intensity, which measures CO2 emissions per unit of energy, is not influenced by exports and imports, nor by FDI. Instead, it is affected positively by financial development and urbanization. Also, we find that an environmental Kuznets curve is present for both CO2 measures so that increases in real GDP per capita have led to reductions in CO2 emissions for at least the most recent decade, controlling for other confounding factors. Furthermore, the sectoral shares of CO2 emissions in total CO2 emissions change asymmetrically with foreign trade for two of four sectors, with export increases leading to lower CO2 shares and imports having the opposite effect.

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  • Haug, Alfred A. & Ucal, Meltem, 2019. "The role of trade and FDI for CO2 emissions in Turkey: Nonlinear relationships," Energy Economics, Elsevier, vol. 81(C), pages 297-307.
    • Handle: RePEc:eee:eneeco:v:81:y:2019:i:c:p:297-307
    DOI: 10.1016/j.eneco.2019.04.006
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    More about this item

    Keywords

    CO2 emissions; Foreign trade; FDI; Linear and nonlinear ARDL; Turkey;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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