IDEAS home Printed from https://ideas.repec.org/a/spr/apjors/v6y2022i1d10.1007_s41685-021-00214-7.html
   My bibliography  Save this article

Interactions among urbanization, industrialization and foreign direct investment (FDI) in determining the environment and sustainable development: new insight from Turkey

Author

Listed:
  • Edmund Ntom Udemba

    (Istanbul Gelisim University)

  • Naci İbrahim Keleş

    (Istanbul Gelisim University)

Abstract

This study seeks to expose environmental implication of Turkey’s urbanization towards its sustainable development. Turkey is considered a commercial cum industrial hub where economic activities are increasingly taking place. Specifically, the economic and manufacturing activities are centered in big cities and this has drawn many people to the urban centers of the country which has potential threats to the environmental performance and sustainable development of the country. We applied 1970–2018 Turkey’s data for this assessment. Structural break, dynamic autoregressive distributed lag (ARDL)-bound and Granger causality estimates were applied in this research. From dynamic ARDL-bound test, we found long run cointegration among the selected variables. From the ARDL short run and long run, we find economic growth (GDP per capita) and FDI having a negative relationship with carbon emission. Also, fossil fuels, industry and urban population showed positive relationship with the carbon emission (CO2). Similar result (except for that of economic growth that is positively related to carbon emission and urban population that is significant) was established in the long run with varying degrees through their various coefficients. We found nexus among the variables of interest in Granger causality estimate. Hence, a two-way Granger causal relationship exist between CO2 and GDP, CO2 and fossil fuels, GDP and fossil fuels while one-way causal relationship exist from urban population to CO2, from FDI and urban population to GDP, from urban population to fossil fuels, from urban population to FDI. Similar pattern Granger result is confirmed in both short run and long run. With these findings, policy is expected to be framed towards mitigation of carbon emissions and increase the chance of achieving sustainable development through controls on urbanization and industrialization negative impacts.

Suggested Citation

  • Edmund Ntom Udemba & Naci İbrahim Keleş, 2022. "Interactions among urbanization, industrialization and foreign direct investment (FDI) in determining the environment and sustainable development: new insight from Turkey," Asia-Pacific Journal of Regional Science, Springer, vol. 6(1), pages 191-212, February.
    • Handle: RePEc:spr:apjors:v:6:y:2022:i:1:d:10.1007_s41685-021-00214-7
    DOI: 10.1007/s41685-021-00214-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41685-021-00214-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s41685-021-00214-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Say, Nuriye Peker & Yucel, Muzaffer, 2006. "Energy consumption and CO2 emissions in Turkey: Empirical analysis and future projection based on an economic growth," Energy Policy, Elsevier, vol. 34(18), pages 3870-3876, December.
    2. Chang, Ching-Chih, 2010. "A multivariate causality test of carbon dioxide emissions, energy consumption and economic growth in China," Applied Energy, Elsevier, vol. 87(11), pages 3533-3537, November.
    3. Korhan Gökmenoğlu & Nigar Taspinar, 2016. "The relationship between Co 2 emissions, energy consumption, economic growth and FDI: the case of Turkey," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(5), pages 706-723, August.
    4. Udi Joshua & Festus V. Bekun & Samuel A. Sarkodie, 2020. "New Insight into the Causal Linkage between Economic Expansion, FDI, Coal consumption, Pollutant emissions and Urbanization in South Africa," Working Papers 20/011, European Xtramile Centre of African Studies (EXCAS).
    5. Rafiq, Shuddhasattwa & Salim, Ruhul & Nielsen, Ingrid, 2016. "Urbanization, openness, emissions, and energy intensity: A study of increasingly urbanized emerging economies," Energy Economics, Elsevier, vol. 56(C), pages 20-28.
    6. Ghosh, Sajal & Kanjilal, Kakali, 2014. "Long-term equilibrium relationship between urbanization, energy consumption and economic activity: Empirical evidence from India," Energy, Elsevier, vol. 66(C), pages 324-331.
    7. Sharif, Arshian & Baris-Tuzemen, Ozge & Uzuner, Gizem & Ozturk, Ilhan & Sinha, Avik, 2020. "Revisiting the role of renewable and non-renewable energy consumption on Turkey’s ecological footprint: Evidence from Quantile ARDL approach," MPRA Paper 100044, University Library of Munich, Germany.
    8. Sharma, Susan Sunila, 2011. "Determinants of carbon dioxide emissions: Empirical evidence from 69 countries," Applied Energy, Elsevier, vol. 88(1), pages 376-382, January.
    9. Andrew Adewale Alola & Seyi Saint Akadiri & Ojonugwa Usman, 2021. "Domestic material consumption and greenhouse gas emissions in the EU‐28 countries: Implications for environmental sustainability targets," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(2), pages 388-397, March.
    10. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    11. Zhang, Chuanguo & Lin, Yan, 2012. "Panel estimation for urbanization, energy consumption and CO2 emissions: A regional analysis in China," Energy Policy, Elsevier, vol. 49(C), pages 488-498.
    12. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
    13. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    14. Wang, Ping & Wu, Wanshui & Zhu, Bangzhu & Wei, Yiming, 2013. "Examining the impact factors of energy-related CO2 emissions using the STIRPAT model in Guangdong Province, China," Applied Energy, Elsevier, vol. 106(C), pages 65-71.
    15. Liu, Yaobin, 2009. "Exploring the relationship between urbanization and energy consumption in China using ARDL (autoregressive distributed lag) and FDM (factor decomposition model)," Energy, Elsevier, vol. 34(11), pages 1846-1854.
    16. Ozturk, Ilhan & Acaravci, Ali, 2013. "The long-run and causal analysis of energy, growth, openness and financial development on carbon emissions in Turkey," Energy Economics, Elsevier, vol. 36(C), pages 262-267.
    17. Hakan Cetintas & I. Murat Bicil & Kumru Turkoz, 2017. "Turkiye'de Enerji Uretiminde Fosil Yakit Kullanimi ve CO2 Emisyonu Iliskisi: Bir Senaryo Analizi," EconWorld Working Papers 17002, WERI-World Economic Research Institute, revised Mar 2017.
    18. Solarin, Sakiru Adebola & Al-Mulali, Usama & Musah, Ibrahim & Ozturk, Ilhan, 2017. "Investigating the pollution haven hypothesis in Ghana: An empirical investigation," Energy, Elsevier, vol. 124(C), pages 706-719.
    19. Muhammad Shahbaz & Rashid Sbia & Helmi Hamdi & Ilhan Ozturk, 2014. "Economic growth, electricity consumption, urbanization and environmental degradation relationship in United Arab Emirates," Post-Print halshs-01902764, HAL.
    20. Adedoyin, Festus Fatai & Alola, Andrew Adewale & Bekun, Festus Victor, 2021. "The alternative energy utilization and common regional trade outlook in EU-27: Evidence from common correlated effects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    21. Bruce E. Hansen, 2001. "The New Econometrics of Structural Change: Dating Breaks in U.S. Labour Productivity," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 117-128, Fall.
    22. Javorcik, Beata Smarzynska & Spatareanu, Mariana, 2008. "To share or not to share: Does local participation matter for spillovers from foreign direct investment?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 194-217, February.
    23. Oktay KIZILKAYA, 2017. "The Impact of Economic Growth and Foreign Direct Investment on CO2 Emissions: The Case of Turkey," Turkish Economic Review, KSP Journals, vol. 4(1), pages 106-118, March.
    24. Ruhul Salim & Shuddhasattwa Rafiq & Sahar Shafiei & Yao Yao, 2019. "Does urbanization increase pollutant emission and energy intensity? evidence from some Asian developing economies," Applied Economics, Taylor & Francis Journals, vol. 51(36), pages 4008-4024, August.
    25. Hãœbler, Michael & Keller, Andreas, 2010. "Energy savings via FDI? Empirical evidence from developing countries," Environment and Development Economics, Cambridge University Press, vol. 15(1), pages 59-80, February.
    26. World Bank, 2015. "Rise of the Anatolian Tigers," World Bank Publications - Reports 22388, The World Bank Group.
    27. Unesco Unesco, 2015. "Water for a Sustainable World," Working Papers id:6657, eSocialSciences.
    28. MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-618, Nov.-Dec..
    29. World Bank, 2015. "Rise of the Anatolian Tigers," World Bank Publications - Reports 22075, The World Bank Group.
    30. Seker, Fahri & Ertugrul, Hasan Murat & Cetin, Murat, 2015. "The impact of foreign direct investment on environmental quality: A bounds testing and causality analysis for Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 347-356.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dongchu Han & Mianfang Liu, 2022. "How Does the Digital Economy Contribute to Regional Green Development in China? Evidence-Based on the Intermediary Effect of Technological Innovation," Sustainability, MDPI, vol. 14(18), pages 1-14, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ertugrul, Hasan Murat & Çetin, Murat & Şeker, Fahri & Dogan, Eyüp, 2015. "The impact of trade openness on global carbon dioxide emissions: Evidence from the top ten emitters among developing countries," MPRA Paper 97539, University Library of Munich, Germany, revised 10 Mar 2016.
    2. Rashid Sbia & Muhammad Shahbaz & Ilhan Ozturk, 2017. "Economic growth, financial development, urbanisation and electricity consumption nexus in UAE," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 30(1), pages 527-549, January.
    3. Mahalik, Mantu Kumar & Villanthenkodath, Muhammed Ashiq & Mallick, Hrushikesh & Gupta, Monika, 2021. "Assessing the effectiveness of total foreign aid and foreign energy aid inflows on environmental quality in India," Energy Policy, Elsevier, vol. 149(C).
    4. Pata, Ugur Korkut, 2018. "The influence of coal and noncarbohydrate energy consumption on CO2 emissions: Revisiting the environmental Kuznets curve hypothesis for Turkey," Energy, Elsevier, vol. 160(C), pages 1115-1123.
    5. Karaaslan, Abdulkerim & Çamkaya, Serhat, 2022. "The relationship between CO2 emissions, economic growth, health expenditure, and renewable and non-renewable energy consumption: Empirical evidence from Turkey," Renewable Energy, Elsevier, vol. 190(C), pages 457-466.
    6. Wang, Wei-Zheng & Liu, Lan-Cui & Liao, Hua & Wei, Yi-Ming, 2021. "Impacts of urbanization on carbon emissions: An empirical analysis from OECD countries," Energy Policy, Elsevier, vol. 151(C).
    7. Muntasir Murshed & Mohamed Elheddad & Rizwan Ahmed & Mohga Bassim & Ei Thuzar Than, 2022. "Foreign Direct Investments, Renewable Electricity Output, and Ecological Footprints: Do Financial Globalization Facilitate Renewable Energy Transition and Environmental Welfare in Bangladesh?," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 29(1), pages 33-78, March.
    8. Xiangrong Ma & Jianping Ge & Wei Wang, 2017. "The relationship between urbanization, income growth and carbon dioxide emissions and the policy implications for China: a cointegrated vector error correction (VEC) analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 87(2), pages 1017-1033, June.
    9. Charfeddine, Lanouar & Ben Khediri, Karim, 2016. "Financial development and environmental quality in UAE: Cointegration with structural breaks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1322-1335.
    10. Li, Ke & Lin, Boqiang, 2015. "Impacts of urbanization and industrialization on energy consumption/CO2 emissions: Does the level of development matter?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1107-1122.
    11. Mohammed Musah & Yusheng Kong & Isaac Adjei Mensah & Stephen Kwadwo Antwi & Mary Donkor, 2021. "The connection between urbanization and carbon emissions: a panel evidence from West Africa," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 11525-11552, August.
    12. Husna Purnama & Toto Gunarto & Ida Budiarty, 2020. "Effects of Energy Consumption, Economic Growth and Urbanization on Indonesian Environmental Quality," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 580-587.
    13. Oruj Gasimli & Ihtisham ul Haq & Sisira Kumara Naradda Gamage & Fadi Shihadeh & Prasanna Sisira Kumara Rajapakshe & Muhammad Shafiq, 2019. "Energy, Trade, Urbanization and Environmental Degradation Nexus in Sri Lanka: Bounds Testing Approach," Energies, MDPI, vol. 12(9), pages 1-16, April.
    14. Magdalene Williams & Ahmad Abu Alrub & Mehmet Aga, 2022. "Ecological Footprint, Economic Uncertainty and Foreign Direct Investment in South Africa: Evidence From Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Approach," SAGE Open, , vol. 12(2), pages 21582440221, April.
    15. Husam Rjoub & Jamiu Adetola Odugbesan & Tomiwa Sunday Adebayo & Wing-Keung Wong, 2021. "Sustainability of the Moderating Role of Financial Development in the Determinants of Environmental Degradation: Evidence from Turkey," Sustainability, MDPI, vol. 13(4), pages 1-18, February.
    16. Gozgor, Giray & Can, Muhlis, 2016. "Does Export Product Quality Matter for CO2 Emissions? Evidence from China," MPRA Paper 71873, University Library of Munich, Germany.
    17. Nasreen, Samia & Anwar, Sofia & Ozturk, Ilhan, 2017. "Financial stability, energy consumption and environmental quality: Evidence from South Asian economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1105-1122.
    18. Marques, António Cardoso & Fuinhas, José Alberto & Neves, Sónia Almeida, 2018. "Ordinary and Special Regimes of electricity generation in Spain: How they interact with economic activity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1226-1240.
    19. Dong Jichang & He Jing & Li Xiuting & Mou Xindi & Dong Zhi, 2020. "The Effect of Industrial Structure Change on Carbon Dioxide Emissions: A Cross-Country Panel Analysis," Journal of Systems Science and Information, De Gruyter, vol. 8(1), pages 1-16, February.
    20. Faisal Faisal & Ruqiya Pervaiz & Nesrin Ozatac & Turgut Tursoy, 2021. "Exploring the relationship between carbon dioxide emissions, urbanisation and financial deepening for Turkey using the symmetric and asymmetric causality approaches," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(12), pages 17374-17402, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:apjors:v:6:y:2022:i:1:d:10.1007_s41685-021-00214-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.