Foreign Direct Investment, Pollution, and Economic Growth

The purpose of this study is to investigate the relationships among Foreign Direct Investment (FDI) inflows, Carbon Dioxide (CO 2 ) emissions, and economic growth in terms of Gross Domestic Product (GDP) for Turkey over the period of 1987Q1–2009Q4. The cointegration analyses suggest that there is a stable long-run equilibrium relationship among the variables under consideration and the results of the Granger causality test, produced from the error-correction model (ECM), show that there is a causal relationship between the variables and lends support to the pollution-haven hypothesis. However, there appears to be no evidence of FDI-led growth in the data.