Abstract:

Purpose: The aim of this study is to test the validity of the environmental Kuznets curve (EKC) and pollution haven (PHH) hypotheses for 55 developing countries. Method: The existence of EKC and PHH hypotheses in developing countries has been examined with the help of static and dynamic panel data techniques. The sample covers the period from 1991 to 2017. Findings: According to the findings obtained from static and dynamic panel data estimators, there is a relationship between economic growth and environmental pollution in developing countries. Similarly, it has been found that foreign direct investments in these countries negatively affect the environmental quality. In addition, according to the heterogeneous panel causality test results, a causality relationship from per capita income, urban population, electricity consumption and foreign direct investments to carbon dioxide emissions per capita was determined. Implications: It has been reached that the EKC and PHH hypotheses are valid in developing countries. Originality: This study aimed to make some significant contributions to the existing literature: i. Examining the validity of the EKC and PHH hypotheses for developing countries panel with using static and dynamic panel data estimators to consider both static and lagged effects and allows for comparision, ii. Investigating the validity of the EKC hypothesis for developing countries panel with both the traditional approach based on exponential calculation and the contemporary approach based on a comparison of long and short run elasticities and thus it is aimed to compare the findings.

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