The Relationship between Real Per Capita Income, Foreign Direct Investment, Trade Openness and Carbon Emissions Under Structural Break in Turkey for the Period of 1974-2016

Abstract

The study aims at examining possible relationships between real per capita income, foreign direct investment, trade openness and carbon emissions in Turkey for the period 1974-2016. Along with unit root test that takes into account the structural break, ARDL bounds test and Toda-Yamamoto causality tests are utilized to analyze the relationships. Findings indicate that all variables have a positive effect on carbon emissions in the long run. Foreign direct investment having positive effect on carbon emissions evidences the validity of the Pollution Haven Hypothesis in Turkey. The causality test results reveal bidirectional causality relationships between all variables and carbon emissions.