Abstract:

There are discussions in the literature on whether there are disadvantages in terms of environmental quality and the economic advantages provided by foreign direct investments in developing countries. These discussions, which were studied within the framework of the Pollution Haven Hypothesis, have been the subject of many empirical studies. This study aims to investigate the relationship between carbon emissions, economic growth, amount of energy use, foreign direct investments, and trade openness for Turkey within the Pollution Haven Hypothesis framework and test whether the hypothesis mentioned above is valid in Turkey. In the study, the validity of the hypothesis in Turkey was tested using the NARDL method between 1970 and 2018. The findings validate that the Pollution Haven Hypothesis is valid for Turkey in the long term. It was also determined that negative shocks in growth and energy use reduce carbon emissions, while positive shocks in energy use and trade openness increase carbon emissions in the long term. The findings that the Pollution Haven Hypothesis is not valid in the short term are among the other findings obtained from the study. Also, it was determined that the negative shock in growth and trade openness and negative and positive shock in the amount of energy use are significant in the short term.

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