Abstract
It is useful to analyze the factors, polluting the livable environment, whose sustainability and protection are vital to all living things, and to take the necessary precautions promptly. Within this scope, the effects of foreign trade and investments on environmental pollution in BRICMT (Brazil, Russia, India, China, Mexico, and Turkey) countries were analyzed with the Fourier Kwiatkowski–Phillips–Schmidt–Shin (KPSS) stationarity test, Fourier Bootstrap augumented autoregressive distributive lag (AARDL) method, and Fourier Bootstrap Toda-Yamamoto causality test for the period 1980–2021 in this study. According to the findings, the pollution haven hypothesis is valid since increasing exports and foreign investment in China increased environmental pollution both in the short term and the long term. While environmental pollution increased in China, Brazil, Mexico, and Turkey with increasing imports, it decreased in Russia. The short-term impact of imports on rising environmental pollution is also valid for Brazil. Since foreign investment increases environmental pollution in Brazil and Mexico in the long run, the pollution haven hypothesis is valid in these countries. In Russia and Mexico, where there are findings that foreign investment reduces environmental pollution in the short term, the pollution halo hypothesis is valid in the short run. According to the Fourier Bootstrap Toda-Yamamoto causality test results, it was determined that there is causality from exports and imports to environmental pollution in China and India and from foreign investment to environmental pollution in Russia and Brazil.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
The data that support the findings of this study are openly available at the following URL: https://datacatalog.worldbank.org/dataset/world-development-indicators.
Notes
The average life expectancy in India has shortened by 10 years due to increasing air pollution. The number of people who died due to air pollution in this country 2017 was 1.24 million (Climate News 2020), which increased to 1.67 million in 2020. This burden on the health system was 12 billion dollars, and the loss of labor and production in the economy was 1.36% of India’s national income (approximately 24 billion dollars) (TRT News 2020).
The pollution haven hypothesis was first proposed in the studies of McGuire (1982).
The analysis period starts from 1980 because FDI stock data are published in UNCTAD (2022) from this date onwards.
The data for Russia starts from 1990 bacause Russian Federation was established in 1990 to replace the collapsed Soviet Union (Union of Soviet Socialist Republics: U.S.S.R.).
For instance, call centers established by foreign companies in this country are an excellent example of this. From technology companies such as IBM and Toshiba to pizza orders in the USA, many call services for other countries are provided through India, and more than 350 thousand people are employed in this sector.
For example, there are 22 ship dismantling (ship breaking) facilities in the Izmir Aliaga zone. In 2009, Turkey imported 73 ships for dismantling; in 2012, it imported 281 ships, and in 2017, 189 boats were brought to Turkey for dismantling (Chamber of Shipping 2018), and tonnes of solid waste imported from other countries to be used in bioenergy production.
Turkey’s plastic waste imports have increased 196 times in the last 16 years. As such, Turkey became the country that imported the most plastic waste from Europe in 2021 (Greenpeace 2021).
Of the FDI inflows to Turkey, 52% in 2019, 50% in 2020, 40% in 2021, and 66% in the first five months of 2022 were real estate purchases (EDDS 2022).
References
Ashraf MZ, Wei W, Usman M, Mushtaq S (2024) How can natural resource dependence, environmental-related technologies and digital trade protect the environment: redesigning SDGs policies for sustainable environment? Resour Policy 88:104456. https://doi.org/10.1016/j.resourpol.2023.104456
Aydin M (2020) The relationship between military expenditure, economic growth, and environmental pollution: evidence from causality test with structural breaks for Turkey. J Res Econ Polit Finan 5(2):261–275. https://doi.org/10.30784/epfad.710276
Balsalobre-Lorente D, Ibáñez-Luzón L, Usman M, Shahbaz M (2022) The environmental Kuznets curve, based on the economic complexity, and the pollution haven hypothesis in PIIGS countries. Renewable Energy 185:1441–1455. https://doi.org/10.1016/j.renene.2021.10.059
Becker R, Enders W, Hurn S (2004) A general test for time dependence in parameters. J Appl Economet 19:899–906. https://doi.org/10.1002/jae.751
Becker R, Enders W, Lee J (2006) A stationarity test in the presence of an unknown number of smooth breaks. J Time Ser Anal 3(5):381–409. https://doi.org/10.1111/j.1467-9892.2006.00478.x
Benzerrouk Z, Abid M, Sekrafi H (2021) Pollution haven or halo effect? A comparative analysis of developing and developed countries. Energy Rep 7:4862–4871. https://doi.org/10.1016/j.egyr.2021.07.076
Bombardini M, Li B (2020) Trade, pollution and mortality in China. J Int Econ 125:103321. https://doi.org/10.1016/j.jinteco.2020.103321
Chamber of Shipping (2018) Ship recycling sector (Gemi Geri DönüşümSektörü). Accessed from: https://www.denizticaretodasi.org.tr/tr/sayfalar/gemi-geri-donusum-sektoru
Cinar S, Yilmazer M, Fazlilar TA (2012) Trade between pollution-creating sectors and environment: a comparison of developed and developing countries. Dogus Univ J 13(2):212–224
Climate News (2020) Air pollution deaths on the rise in India (indistan’da Hava Kirliliği Ölümleri Artıyor). Accessed from: https://www.iklimhaber.org/hindistanda-hava-kirliligi-kaynakli-olumler-artiyor
Dickey DA, Fuller WA (1981) Distribution of the estimators for autoregressive time series with a unit root. Econometrica 49:1057–1072. https://doi.org/10.2307/2286348
EDDS (2022). Balance of payments statistics. Accessed from: https://evds2.tcmb.gov.tr/index.php?/evds/serieMarket/collapse_4/5885/DataGroup/english/bie_bosluk1
Enders W, Jones P (2016) Grain prices, oil prices, and multiple smooth breaks in a VAR. Stud Nonlinear Dyn Econom 20(4):399–419. https://doi.org/10.1515/snde-2014-0101
Euronews (2019) The World’s Air Quality Report Card: 9 in 10 breathe polluted air (Dünya’nın Hava Kalitesi Karnesi: Her 10 Kişiden 9’u Kirli Hava Soluyor). Accessed from: https://tr.euronews.com/2019/03/06/dunyanin-hava-kalitesi-karnesi-her-10-kisiden-9-u-kirli-hava-soluyor
Granger CW (1969) Investigating causal relations by econometric models and cross-spectral methods. Econometrica: J Econ Soc 424–438. https://doi.org/10.2307/1912791
Greenpeace (2021) Turkey again became the country receiving the most plastic garbage from Europe. (Türkiye Yine Avrupa’dan En Çok Plastik Çöp Alan Ülke Oldu). Accessed from: https://www.greenpeace.org/turkey/basin-bultenleri/turkiye-yine-avrupadan-en-cok-plastik-cop-alan-ulke-oldu
Grossman GM, Krueger AB (1995) Economic growth and the environment. Quart J Econ 110(2):353–377. https://doi.org/10.2307/2118443
Jahanger A, Usman M (2023) Investigating the role of information and communication technologies, economic growth, and foreign direct investment in the mitigation of ecological damages for achieving sustainable development goals. Eval Rev 47(4):653–679. https://doi.org/10.1177/0193841X221135673
Jahanger A, Hossain MR, Usman M, Onwe JC (2023) Recent scenario and nexus between natural resource dependence, energy use and pollution cycles in BRICS region: does the mediating role of human capital exist? Resour Policy 81:103382. https://doi.org/10.1016/j.resourpol.2023.103382
Kapetanios G (2005) Unit root testing against the alternative hypothesis of up to m structural breaks. J Time Ser Anal 26:123–133. https://doi.org/10.1111/j.1467-9892.2005.00393.x
Ke J, Jahanger A, Yang B, Usman M, Ren F (2022) Digitalization, financial development, trade, and carbon emissions; implication of pollution haven hypothesis during globalization mode. Front Environ Sci 10:211. https://doi.org/10.3389/fenvs.2022.873880
Khan MTI, Anwar S (2022) Natural disasters and foreign exchange reserves: The role of renewable energy and human capital. Ren Energy 192:838–848. https://doi.org/10.1016/j.renene.2022.05.022
Khan MTI, Anwar S, Sarkodie SA, Yaseen MR, Nadeem AM (2023) Do natural disasters affect economic growth? The role of human capital, foreign direct investment, and infrastructure dynamics. Heliyon 9(1). https://doi.org/10.1016/j.heliyon.2023.e12911
Kwiatkowski D, Phillips PCB, Schmidt P, Shin Y (1992) Testing the null hypothesis of stationarity against the alternative of a unit root: how sure are we that the economic time series have a unit root? J Econ 54(159):178. https://doi.org/10.1016/0304-4076(92)90104-Y
Lee J, Strazicich M (2003) Minimum Lagrange multiplier unit root tests with two structural breaks. Rev Econ Stat 81:1082–1089. https://www.jstor.org/stable/3211829
Liu J, Qu J, Zhao K (2019) Is China’s development conforms to the environmental Kuznets curve hypothesis and the pollution haven hypothesis? J Clean Prod 234:787–796. https://doi.org/10.1016/j.jclepro.2019.06.234
Lütkepohl H (2005) New introduction to multiple time series analysis. Springer Science & Business Media
McGuire MC (1982) Regulation, factor rewards, and ınternational trade. J Public Econ 17(3):335–354. https://doi.org/10.1016/0047-2727(82)90069-X
McNown R, Sam CY, Goh SK (2018) Bootstrapping the autoregressive distributed lag test for cointegration. Appl Econ 50(13):1509–1521. https://doi.org/10.1080/00036846.2017.1366643
Mert M, Caglar AE (2020) Testing pollution haven and pollution halo hypotheses for Turkey: a new perspective. Environ Sci Pollut Res 27:32933–32943. https://doi.org/10.1007/s11356-020-09469-7
Naeem MK, Anwar S, Nasreen S (2021) Empirical analysis of CO2 emissions and sustainable use of energy sources in Pakistan. Environ Sci Pollut Res 28:16420–16433. https://doi.org/10.1007/s11356-020-11927-1
Nazlioglu S, Gormus NA, Soytas U (2016) Oil prices and real estate ınvestment trusts (REITs): gradual-shift causality and volatility transmission analysis. Energy Econ 60:168–175. https://doi.org/10.1016/j.eneco.2016.09.009
Nejati M, Taleghani F (2022) Pollution halo or pollution haven? A CGE appraisal for Iran. J Clean Prod 344(6):131092. https://doi.org/10.1016/j.jclepro.2022.131092
OECD (2022) Air and GHG emissions. Carbon dioxide (CO2), million tonnes, 1960 – 2020. Accessed from: https://data.oecd.org/air/air-and-ghg-emissions.htm#indicator-chart, https://doi.org/10.1787/93d10cf7-en
Pata UK, Caglar AE (2021) Investigating the EKC hypothesis with renewable energy consumption, human capital, globalization and trade openness for China: evidence from augmented ARDL approach with a structural break. Energy 216:119220. https://doi.org/10.1016/j.energy.2020.119220
Perron P (1989) The great crash, the oil price shock, and the unit root hypothesis. Econometrica: J Econ Soc 1361–1401. https://doi.org/10.2307/1913712
Perron P (1994) Trend, unit root and structural change in macroeconomic time series. In Cointegration: for the Applied Economist, 113–146. https://doi.org/10.1007/978-1-349-23529-2_4
Pesaran HM, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Economet 16(3):289–326. https://doi.org/10.1002/jae.616
Phillips PCB, Perron P (1988) Testing for a unit root in time series regression. Biometrika 75(2):335 346. http://www.jstor.org/stable/2336182
Porter G (1999) Trade competition and pollution standards: “race to the bottom” or “stuck at the bottom”?. J Environ Dev 8(2):133–151. https://www.jstor.org/stable/44319440
Qing L, Usman M, Radulescu M, Haseeb M (2024) Towards the vision of going green in South Asian region: the role of technological innovations, renewable energy and natural resources in ecological footprint during globalization mode. Resour Policy 88:104506. https://doi.org/10.1016/j.resourpol.2023.104506
Ranocchia C, Lambertini L (2021) Porter hypothesis vs pollution haven hypothesis: can there be environmental policies getting two eggs in one basket? Environ Resource Econ 78:177–199. https://doi.org/10.1007/s10640-020-00533-x
Saeed S, Makhdum MSA, Anwar S, Yaseen MR (2023) Climate Change Vulnerability, Adaptation, and Feedback Hypothesis: A Comparison of Lower-Middle, Upper-Middle, and High-Income Countries. Sustainability 15(5):4145. https://doi.org/10.3390/su15054145
Sam CY, McNown R, Goh SK (2019) An augmented autoregressive distributed lag bounds test for cointegration. Econ Model 80:130–141. https://doi.org/10.1016/j.econmod.2018.11.001
Saqib N, Usman M (2023) Are technological innovations and green energy prosperity swiftly reduce environmental deficit in China and United States? Learning from two sides of environmental sustainability. Energy Rep 10:1672–1687. https://doi.org/10.1016/j.egyr.2023.08.022
Saqib N, Ozturk I, Usman M, Sharif A, Razzaq A (2024) Pollution haven or halo? How European countries leverage FDI, energy, and human capital to alleviate their ecological footprint. Gondwana Res 116:136–148. https://doi.org/10.1016/j.gr.2022.12.018
Shinwari R, Zakeria I, Usman M, Sadiq M (2023) Revisiting the relationship between FDI, natural resources, and economic growth in Afghanistan: does political (in) stability matter?. J Knowl Econ 1–30. https://doi.org/10.1007/s13132-023-01264-2
Solarin SA (2019) Modelling the relationship between financing by Islamic banking system and environmental quality: evidence from bootstrap autoregressive distributive lag with Fourier terms. Qual Quant 53:2867–2884. https://doi.org/10.1007/s11135-019-00904-7
Sun Y, Usman M, Radulescu M, Pata UK, Balsalobre-Lorente D (2023) New insights from the STIPART model on how environmental-related technologies, natural resources and the use of the renewable energy influence load capacity factor. Gondwana Res 1–19. https://doi.org/10.1016/j.gr.2023.05.018
Temurshoev U (2006) Pollution haven hypothesis or factor endowment hypothesis: theory and empirical examination for The US and China. CERGE-EI (Center for Economic Research and Graduate Education Academy of Sciences of the Czech Republic Economics Institute), Working Paper Series, No: 292. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1147660
Toda HY, Yamamoto T (1995) Statistical ınference in vector autoregression with possibly ıntegrated processes. J Econ 66(1–2):225–250. https://doi.org/10.1016/0304-4076(94)01616-8
TRT News (2020) Air pollution scares India: 1 million 670,000 people died last year. Accessed from: https://www.trthaber.com/haber/dunya/hindistanda-hava-kirliligi-korkutuyor-gecen-yil-1-milyon-670-bin-kisi-oldu-540424.html
Uddin I, Usman M, Saqib N, Makhdum MSA (2023) The impact of geopolitical risk, governance, technological innovations, energy use, and foreign direct investment on CO2 emissions in the BRICS region. Environ Sci Pollut Res 1–16. https://doi.org/10.1007/s11356-023-27466-4
UNCTAD (2022) Foreign direct ınvestment: ınward and outward flows and stock, Annual. Erişim adresi: https://unctadstat.unctad.org/wds/TableViewer/downloadPrompt.aspx
Usman M, Jahanger A, Makhdum MSA, Radulescu M, Balsalobre-Lorente D, Jianu E (2022) An empirical investigation of ecological footprint using nuclear energy, industrialization, fossil fuels and foreign direct investment. Energies 15(17):6442. https://doi.org/10.3390/en15176442
Usman M, Balsalobre-Lorente D, Jahanger A, Ahmad P (2023) Are Mercosur economies going green or going away? An empirical investigation of the association between technological innovations, energy use, natural resources and GHG emissions. Gondwana Res 113:53–70. https://doi.org/10.1016/j.gr.2022.10.018
Wang Q, Zhang F (2021) Free trade and renewable energy: a cross-ıncome levels empirical ınvestigation using two trade openness measures. Renew Energy 168:1027–1039. https://doi.org/10.1016/j.renene.2020.12.065
Wang R, Usman M, Radulescu M, Cifuentes-Faura J, Balsalobre-Lorente D (2023) Achieving ecological sustainability through technological innovations, financial development, foreign direct investment, and energy consumption in developing European countries. Gondwana Res 119:138–152. https://doi.org/10.1016/j.gr.2023.02.023
World Bank (2022a). Merchandise exports (current US$). Accessed from: https://data.worldbank.org/indicator/TX.VAL.MRCH.CD.WT?view=chart
World Bank (2022b) Merchandise imports (current US$). Accessed from: https://data.worldbank.org/indicator/TM.VAL.MRCH.CD.WT?view=chart
Xu Q, Khan S, Zhang X, Usman M (2023) Urbanization, rural energy-poverty, and carbon emission: unveiling the pollution halo effect in 48 BRI countries. Environ Sci Pollut Res 30(48):105912–105926. https://doi.org/10.1007/s11356-023-29861-3
Yakaci S (2019) Analysis of environmental ımpacts of foreign trade in Turkey and developing countries within the environmental Kuznets curve. Şırnak University, Master. https://openaccess.sirnak.edu.tr/xmlui/handle/11503/1838
Yang S, Jahanger A, Usman M (2024) Examining the influence of green innovations in industrial enterprises on China’s smart city development. Technol Forecast Soc Chang 199:123031. https://doi.org/10.1016/j.techfore.2023.123031
Yılancı V (2017) Analysing the relationship between oil prices and economic growth: a Fourier approach. Istanbul Univ Econ Stat e-J (27):51–67. https://dergipark.org.tr/en/pub/iuekois/issue/34234/378328
Yildirim M, Destek MA, Ozsoy FN (2017) Foreign direct ınvestment and pollution haven hypothesis. J Econ Adm Sci 18(2):99–111. http://esjournal.cumhuriyet.edu.tr/tr/download/article-file/370376
Zhang Y (2012) Scale, technique and composition effects in trade-related carbon emissions in China. Environ Resource Econ 51(3):371–389. https://doi.org/10.1007/s10640-011-9503-9
Zhengxia T, Haseeb M, Usman M, Shuaib M, Kamal M, Khan MF (2023) The role of monetary and fiscal policies in determining environmental pollution: revisiting the N-shaped EKC hypothesis for China. Environ Sci Pollut Res 30(38):89756–89769. https://doi.org/10.1007/s11356-023-28672-w
Zivot E, Andrews DWK (1992) Further evidence on the great crash, the oil price shock, and the unit-root hypothesis. J Bus Econ Stat 10(3):251–270. https://doi.org/10.2307/1391541
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Ethics approval and consent to participate
Not applicable
Consent for publication
Not applicable
Competing interests
The authors declare no competing interests.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Ozcelik, O., Bardakci, H., Barut, A. et al. Testing the validity of pollution haven and pollution halo hypotheses in BRICMT countries by Fourier Bootstrap AARDL method and Fourier Bootstrap Toda-Yamamoto causality approach. Air Qual Atmos Health (2024). https://doi.org/10.1007/s11869-024-01522-5
Received:
Accepted:
Published:
DOI: https://doi.org/10.1007/s11869-024-01522-5