POLLUTION HAVEN HYPOTHESIS AND FOREIGN DIRECT INVESTMENTS: EVIDENCE FROM THE CENTRAL ASIA’S TURKIC REPUBLICS

Authors : Nalan IŞIK, Atakan IŞIK

Pages : 88-104

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Publication Date : 2018-12-31

Abstract :In recent years, Central Asia’s Turkic Republics have become the center of attraction for foreign direct investments of multinational corporations. The issue of debate in the litera- ture is that the relocate of multinational companies to countries with weaker environmental standards has increased the environmental pollution due to foreign direct investments. In this context, the study aimed to investigate the relationship between direct foreign invest- ments and carbon emissions in Central Asia’s Turkic Republics. For this, panel cointegration test was applied to data of direct foreign investments and CO emissions of six Turkish Republics (Azerbaijan, Kyrgyzstan, Kazakhstan, Turkey, Turkmenistan and Uzbekistan) during 1995-2016 period. According to the test findings, CO emissions and foreign direct investments are assumed to be cointegrated. Long-term cointegration coefficients of the variables across the panel were investigated by panel dynamic least squares method. Empirical results show that foreign direct investments and CO emissions are long-term positive and significant. The findings of the study confirm the hypothesis of pollution havens.
Keywords : Pollution Haven Hypothesis, Foreign Direct Investment, Central Asia’s Turkic Republics, Panel Data Analysis

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