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Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries

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  • Al-mulali, Usama
  • Foon Tang, Chor

Abstract

This study investigated the validity of the pollution haven hypothesis in the Gulf Cooperation Council (GCC) countries using a multivariate framework. To achieve the goal of this study, the non-stationary panel techniques were used to examine the hypothesis from 1980 to 2009. Based on the Pedroni cointegration test results, it was found that the variables are cointegrated. Moreover, the Fully Modified OLS results showed that energy consumption and GDP growth increase CO2 emission while foreign direct investment inflows have a long run negative relationship with CO2 emission. Furthermore, based on the short run Granger causality test results, FDI has no short run causal relationship with CO2 emission and energy consumption while energy consumption and GDP growth have a positive causal relationship with CO2 emission. Thus, the results of this study indicate that energy consumption and GDP growth are the source of pollution in the GCC countries and not the foreign direct investment inflows. Thus, the study recommended that these countries should utilize policies to encourage inward foreign investment since it plays an important role in stimulating GDP growth.

Suggested Citation

  • Al-mulali, Usama & Foon Tang, Chor, 2013. "Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries," Energy Policy, Elsevier, vol. 60(C), pages 813-819.
  • Handle: RePEc:eee:enepol:v:60:y:2013:i:c:p:813-819
    DOI: 10.1016/j.enpol.2013.05.055
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    Cited by:

    1. Mesagan, Ekundayo, 2015. "Economic Growth and Environment Nexus: The Role of Foreign Direct Investment," MPRA Paper 76722, University Library of Munich, Germany.
    2. John McCollough & Miao He & Arzu Tay Bayramoglu, 2016. "Pollution Havens and Their Relationship to the Environmental Kuznets Curve: The Case of the us Tyre Industry," Economic Affairs, Wiley Blackwell, vol. 36(3), pages 258-272, October.
    3. Jiajia Zheng & Pengfei Sheng, 2017. "The Impact of Foreign Direct Investment (FDI) on the Environment: Market Perspectives and Evidence from China," Economies, MDPI, Open Access Journal, vol. 5(1), pages 1-15, March.
    4. repec:eee:rensus:v:81:y:2018:i:p2:p:2002-2010 is not listed on IDEAS
    5. Shahbaz, Muhammad & Balsalobre, Daniel & Shahzad, Syed Jawad Hussain, 2018. "The Influencing Factors of CO2 Emissions and the Role of Biomass Energy Consumption: Statistical Experience from G-7 Countries," MPRA Paper 87456, University Library of Munich, Germany, revised 14 Jun 2018.
    6. 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.
    7. Zhang, Chuanguo & Zhou, Xiangxue, 2016. "Does foreign direct investment lead to lower CO2 emissions? Evidence from a regional analysis in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 943-951.
    8. Aşıcı, Ahmet Atıl, 2015. "On the sustainability of the economic growth path of Turkey: 1995–2009," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1731-1741.
    9. Jeyhun I. Mikayilov & Marzio Galeotti & Fakhri J. Hasanov, 2018. "The Impact of Economic Growth on CO2 Emissions in Azerbaijan," IEFE Working Papers 102, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    10. repec:eco:journ2:2018-01-20 is not listed on IDEAS
    11. Ren, Shenggang & Yuan, Baolong & Ma, Xie & Chen, Xiaohong, 2014. "The impact of international trade on China׳s industrial carbon emissions since its entry into WTO," Energy Policy, Elsevier, vol. 69(C), pages 624-634.
    12. Li, Jianglong & Lin, Boqiang, 2017. "Does energy and CO2 emissions performance of China benefit from regional integration?," Energy Policy, Elsevier, vol. 101(C), pages 366-378.
    13. Mansor H. Ibrahim & Siong Hook Law, 2016. "Institutional Quality and CO 2 Emission–Trade Relations: Evidence from Sub-Saharan Africa," South African Journal of Economics, Economic Society of South Africa, vol. 84(2), pages 323-340, June.
    14. 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.
    15. repec:gam:jsusta:v:9:y:2017:i:5:p:741-:d:97514 is not listed on IDEAS
    16. Salahuddin, Mohammad & Gow, Jeff & Ozturk, Ilhan, 2015. "Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council Countries robust?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 317-326.
    17. Shahbaz, Muhammad & Nasreen, Samia & Abbas, Faisal & Anis, Omri, 2015. "Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries?," Energy Economics, Elsevier, vol. 51(C), pages 275-287.
    18. repec:eee:eneeco:v:64:y:2017:i:c:p:13-23 is not listed on IDEAS
    19. Paramati, Sudharshan Reddy & Apergis, Nicholas & Ummalla, Mallesh, 2017. "Financing clean energy projects through domestic and foreign capital: The role of political cooperation among the EU, the G20 and OECD countries," Energy Economics, Elsevier, vol. 61(C), pages 62-71.
    20. Tang, Chor Foon & Tan, Bee Wah, 2015. "The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam," Energy, Elsevier, vol. 79(C), pages 447-454.
    21. Yu Hao & Yi-Ming Liu, 2014. "Has the development of FDI and foreign trade contributed to China's CO2 emissions? An empirical study with provincial panel data," CEEP-BIT Working Papers 72, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    22. repec:eee:rensus:v:76:y:2017:i:c:p:555-576 is not listed on IDEAS

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