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

Temurlenk M. Sinan () and Lögün Anıl ()
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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

Economics and Business Review, 2022, vol. 8, issue 1, 5-23

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.

Keywords: Pollution Haven Hypothesis; foreign direct investments (FDI); emissions; nonlinear autoregressive distributed lag model; Turkey (search for similar items in EconPapers)
JEL-codes: C33 E1 Q52 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/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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