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Relationships among CO2 Emissions, Economic Growth and Foreign Direct Investment and the Environmental Kuznets Curve Hypothesis in Turkey

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  • Mesut Bal bey

    (Faculty of Economics and Administrative Sciences, Tunceli University, Tunceli, Turkey.)

Abstract

This study examines the causal relationships between economic growth, carbon dioxide emission and foreign direct investment (FDI) and evaluates the environmental kuznets curve (EKC) hypothesis for Turkey in 1974-2011. Firstly, the causality relationships investigated by using the Johansen Cointegration test, The Granger Causality Test, Impulse-Response and Variance Decomposition Analysis of vector autoregression model (VAR) model. The causality relationships display that FDI (LFDI) and economic growth (LGDP) have a significant effect on carbon dioxide emissions (LCO2). Moreover, impulse-response functions and variance-decompositions of VAR model support these relationships among LGDP, LCO2 and LFDI. Secondly, the study investigates the validity of the EKC hypothesis in Turkey for the period 1974-2011 by using regression model approach for the various EKC model forms such as linear, quadratic, and cubic. Consequently, economic growth leads to degradation of environment and depletion of natural resources. It must be the major aim to obtain a sustainable economic growth by less CO2 emissions and consuming less energy. Moreover, the policy makers may take account exogenous impacts such as foreign investments to plan energy policies, and to maintain economic growth against global climate warming.

Suggested Citation

  • Mesut Bal bey, 2015. "Relationships among CO2 Emissions, Economic Growth and Foreign Direct Investment and the Environmental Kuznets Curve Hypothesis in Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 1042-1049.
    • Handle: RePEc:eco:journ2:2015-04-16
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    CO2 Emission; Economic Growth; Environmental Kuznets Curve Hypothesis; Granger Causality; Johansen Cointeration; Impulse-Response;
    All these keywords.

    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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