Is the Pollution Haven Hypothesis (PHH) Valid for Turkey?

  • Harun Terzi Karadeniz Technical University, Faculty of Economics and Administrative Sciences, Department of Economics,Turkey
  • Ugur Korkut Pata Osmaniye Korkut Ata University, Faculty of Economics and Administrative Sciences, Department of Economics, Turkey

Abstract

The relationship between FDI inflows and carbon dioxide (CO2) emissions is still one of the most important topics among both environmentalists and economists. In this study, the Toda-Yamamoto-augmented Granger causality method is applied to analyze the relationship between FDI inflows and CO2 emissions by employing annual data from 1974 to 2011 to determine whether the pollution haven hypothesis is valid in Turkey. The results of the causality test indicated that FDI inflows and CO2 emissions have a short-run univariate causal relationship, with positive causality moving from CO2 emissions to FDI inflows. One direction effect of CO2 emissions on FDI inflows supports the pollution haven hypothesis in Turkey.
Key words: FDI Inflows, CO2 Emissions, TY-VAR Causality, Turkey.
JEL: O10, F13, Q56, C22.

How to Cite
Terzi H., & Pata U.K. (2019). Is the Pollution Haven Hypothesis (PHH) Valid for Turkey? Panoeconomicus, Advance online publication, 1-18. doi:10.2298/PAN161229016T
Section
Original scientific paper