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Environmental Kuznets Curve and the Pollution-Halo/Haven Hypotheses: An Investigation in Brazilian Municipalities

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  • Eduardo Polloni-Silva

    (Department of Production Engineering (DEP), Federal University of São Carlos (UFSCar), São Carlos 13565-905, Brazil)

  • Diogo Ferraz

    (Department of Economics (DEECO), Federal University of Ouro Preto (UFOP), Mariana 35420-000, Brazil
    Department of Production Engineering, São Paulo State University (UNESP), Bauru 17033-360, Brazil
    Department of Innovation Economics, University of Hohenheim, 70599 Stuttgart, Germany)

  • Flávia de Castro Camioto

    (Department of Production Engineering, Federal University of Triângulo Mineiro (UFTM), Uberaba 38025-180, Brazil)

  • Daisy Aparecida do Nascimento Rebelatto

    (Department of Production Engineering, Escola de Engenharia de São Carlos (EESC), University of São Paulo (USP), São Carlos 13566-590, Brazil)

  • Herick Fernando Moralles

    (Department of Production Engineering (DEP), Federal University of São Carlos (UFSCar), São Carlos 13565-905, Brazil)

Abstract

There is much discussion on the non-linear relationship between economic growth and carbon dioxide (CO 2 ) emissions. Additionally, the effects of Foreign Direct Investment (FDI) on the environment are ambiguous, as both beneficial (i.e., pollution-halo) and harmful (i.e., pollution-haven) effects were found. Therefore, the literature presents no consensus on either of these topics. This is especially problematic for developing regions, as these regions represent growing economies interested in receiving foreign investments, and their CO 2 -related research is limited. This study aims to understand the impacts of economic growth and FDI on the CO 2 emissions of São Paulo state, Brazil. To perform this study, a unique dataset on regional FDI was built, and 592 municipalities were included. The analyses combine linear and non-linear estimations, and the results suggest a non-linear relationship between Gross Domestic Product (GDP) per capita and CO 2 emissions, along with a negative association between FDI and CO 2 . Finally, this study discusses possible policy implications and contributes to the international literature.

Suggested Citation

  • Eduardo Polloni-Silva & Diogo Ferraz & Flávia de Castro Camioto & Daisy Aparecida do Nascimento Rebelatto & Herick Fernando Moralles, 2021. "Environmental Kuznets Curve and the Pollution-Halo/Haven Hypotheses: An Investigation in Brazilian Municipalities," Sustainability, MDPI, vol. 13(8), pages 1-19, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:8:p:4114-:d:531594
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