The Pollution Haven Hypothesis and Foreign Trade - A Survey on the Relation with Environment

The liberalization of foreign trade has enabled the movement of foreign direct investments between countries. Therefore, developing countries have sought to achieve their industrialization targets by applying loose environmental policies to attract foreign direct investments to their own countries. These environmental policies are attractive to pollution-causing industries in developed countries and cause the movement of these industries to developing countries. This situation has been the subject of research in the literature under the name of “Pollution Haven Hypothesis” or “Pollution Shelters Hypothesis”. This study aims to examine the studies contributing to the Pollution Paradise Hypothesis literature. The results based on our review of existing literature show that there is still no clear conclusion on the Pollution Haven Hypothesis.