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An analysis of the Pollution Haven Hypothesis in the context of Turkey: A nonlinear approach

Author

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  • Temurlenk M. Sinan

    (Atatürk University, Faculty of Economics and Administrative Sciences, Department of Econometrics, 25240, Erzurum, Turkey)

  • Lögün Anıl

    (Atatürk University, Faculty of Economics and Administrative Sciences, Department of Econometrics, 25240, Erzurum, Turkey)

Abstract

Foreign direct investment (FDI) is an important driver of countries’ economic development. Factors such as looser environmental regulations may cause dirty FDI to flow mainly to developing countries. This is explained by the Pollution Haven Hypothesis. The paper aims to investigate whether the Pollution Haven Hypothesis is valid in Turkey using the nonlinear autoregressive distributed lag (NARDL) approach for the period 1974–2017. The results show that FDI inflows and carbon emissions have asymmetric effects in both the short and long term for Turkey, supporting the Pollution Haven Hypothesis. Furthermore, there is a link between carbon emissions and trade openness, manufacturing and economic growth. Policymakers should develop the policies necessary to transfer clean technologies to Turkey by providing improvements and technical advances for a more efficient energy use.

Suggested Citation

  • Temurlenk M. Sinan & Lögün Anıl, 2022. "An analysis of the Pollution Haven Hypothesis in the context of Turkey: A nonlinear approach," Economics and Business Review, Sciendo, vol. 8(1), pages 5-23, April.
    • Handle: RePEc:vrs:ecobur:v:8:y:2022:i:1:p:5-23:n:3
    DOI: 10.18559/ebr.2022.1.2
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    Keywords

    Pollution Haven Hypothesis; foreign direct investments (FDI); emissions; nonlinear autoregressive distributed lag model; Turkey;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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