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The Impact of Foreign Direct Investments on Environmental Quality: The Case of China

Year 2022, Volume: 24 Issue: 3, 1249 - 1266, 28.12.2022
https://doi.org/10.26745/ahbvuibfd.1114672

Abstract

China was responsible for 24.57% of global fossil fuel consumption and 28.88% of global CO2 emissions in 2018. In addition, China has been the country that most negatively affected the environmental quality, with an increase of 160.19% in 2018 among the BRICS countries in its ecological footprint, which is another indicator of environmental quality. Therefore, it is important to determine the factors affecting environmental pollution in China. This study aims to investigate whether Foreign Direct Investment (FDI) inflows in China from the period 1990-2018 are increasing or decreasing pollution. For this, a model with annual variables of FDI inflow per capita, energy use per capita, and CO2 emissions per capita was used. The existence of a long-term relationship between the variables was investigated with the Fourier ADL method. FMOLS, DOLS, and CCR were used for long-term coefficient estimates. According to the results, FDI inflows and energy consumption reduces CO2 emissions in China. Thus, it has been seen that the pollution Halo hypothesis is valid for China.

References

  • Akar, I. (2019). Kirlilik Cennetleri Hipotezi, Dış Ticaret ve Çevre İlişkisinin Literatür Araştırması. Economics Literature, 1(1), 37-50.
  • Asghari, M. (2013). Does FDI promote MENA region’s environment quality? Pollution halo or pollution haven hypothesis. Int J Sci Res Environ Sci, 1(6), 92-100.
  • Aslan, A., Altinoz, B., & Atay Polat, M. (2021). The nexus among climate change, economic growth, foreign direct investments, and financial development: New evidence from N‐11 countries. Environmental Progress & Sustainable Energy, 40(3), e13585.
  • Arı, A. (2021). Yenilenebilir Enerji ve Doğrudan Yabancı Yatırımlar: Türkiye Örneği. Karamanoğlu Mehmet Bey Üniversitesi Sosyal ve Ekonomik Araştırmalar Dergisi, 23(40), 122-131.
  • Bakirtas, I., & Cetin, M. A. (2017). Revisiting the environmental Kuznets curve and pollution haven hypotheses: MIKTA sample. Environmental Science and Pollution Research, 24(22), 18273-18283.
  • Banerjee, A., Dolado, J., & Mestre, R. (1998). Error‐correction mechanism tests for cointegration in a single‐equation framework. Journal of time series analysis, 19(3), 267-283.
  • Banerjee, P., Arčabić, V., & Lee, H. (2017). Fourier ADL cointegration test to approximate smooth breaks with new evidence from crude oil market. Economic Modelling, 67, 114-124.
  • Bao, Q., Chen, Y., & Song, L. (2011). Foreign direct investment and environmental pollution in China: a simultaneous equations estimation. Environment and Development Economics, 16(1), 71-92.
  • Bevan, A. A., & Estrin, S. (2004). The determinants of foreign direct investment into European transition economies. Journal of comparative economics, 32(4), 775-787.
  • Bozkaya, Ş. (2019) Doğrudan Yabancı Yatırımlar ve Kırlılık Sığınağı İlişkisi: Çin Örneğı. Studies, 5(11), 71-84.
  • Bulus, G. C., & Koc, S. (2021). The effects of FDI and government expenditures on environmental pollution in Korea: the pollution haven hypothesis revisited. Environmental Science and Pollution Research, 28(28), 38238-38253.
  • Chen, J. H., & Huang, Y. F. (2013). The study of the relationship between carbon dioxide (CO2) emission and economic growth. Journal of International and Global Economic Studies, 6(2), 45-61.
  • Dam, L., & Scholtens, B. (2012). The curse of the haven: The impact of multinational enterprise on environmental regulation. Ecological Economics, 78, 148-156.
  • Destek, M. A., & Okumus, I. (2019). Does pollution haven hypothesis hold in newly industrialized countries? Evidence from ecological footprint. Environmental Science and Pollution Research, 26(23), 23689-23695.
  • Dou, J., & Han, X. (2019). How does the industry mobility affect pollution industry transfer in China: Empirical test on Pollution Haven Hypothesis and Porter Hypothesis. Journal of cleaner production, 217, 105-115.
  • Dünya Bankası (2022). World development indicators online database. https://databank.worldbank.org/source/world-developmentindicators, (Erişim Tarihi: 6 Mayıs 2022).
  • Enders, W., & Lee, J. (2012). The flexible Fourier form and Dickey–Fuller type unit root tests. Economics Letters, 117(1), 196-199.
  • Fereidouni, H. G. (2013). Foreign direct investments in real estate sector and CO2 emission: Evidence from emerging economies. Management of Environmental Quality: An International Journal.
  • Hansen, B. E., & Phillips, P. C. (1988). Estimation and inference in models of cointegration: A simulation study.
  • He, J. (2006). Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces. Ecological Economics, 60(1), 228-245.
  • Hoffmann, R., Lee, C. G., Ramasamy, B., & Yeung, M. (2005). FDI and pollution: a granger causality test using panel data. Journal of International Development: The Journal of the Development Studies Association, 17(3), 311-317.
  • Internatıonal Energy Agency (IEA). (2022). Data and Statistics, https://www.iea.org, (Erişim Tarihi: 4 Mayıs 2022).
  • International Monetary Fund (IMF). (2015). World Economic Outlook, https://www.imf.org/external/pubs/ft/weo/2015/02/pdf/text.pdf, (Erişim Tarihi: 2 Mayıs 2022).
  • Jiang, L., Zhou, H. F., Bai, L., & Zhou, P. (2018). Does foreign direct investment drive environmental degradation in China? An empirical study based on air quality index from a spatial perspective. Journal of cleaner production, 176, 864-872.
  • Kearsley, A., & Riddel, M. (2010). A further inquiry into the pollution haven hypothesis and the environmental Kuznets curve. Ecological Economics, 69(4), 905-919.
  • Koçak, E., & Şarkgüneşi, A. (2018). The impact of foreign direct investment on CO2 emissions in Turkey: new evidence from cointegration and bootstrap causality analysis. Environmental Science and Pollution Research, 25(1), 790-804.
  • Liang, F. H. (2008). Does foreign direct investment harm the host country’s environment? Evidence from China. Evidence from China (Nov 28, 2008).
  • Liu, J., Qu, J., & Zhao, K. (2019). Is China's development conforms to the Environmental Kuznets Curve hypothesis and the pollution haven hypothesis?. Journal of Cleaner Production, 234, 787-796.
  • Manga, M., & Cengiz, O. (2020). Çevresel Kuznets Hipotezine Küreselleşme Eksenli Yaklaşım: Türki Cumhuriyetler Örneği. Süleyman Demirel Üniversitesi Vizyoner Dergisi, 11(28), 738-752.
  • Mark, N. C., & Sul, D. (2003). Cointegration vector estimation by panel DOLS and long‐run money demand. Oxford Bulletin of Economics and statistics, 65(5), 655-680.
  • Mehmood, B., Feliceo, A., & Shahid, A. (2014). What causes what? Aviation demand and economic growth in Romania: Cointegration estimation and causality analysis. Romanian Economic and B.
  • Nasrollahi, Z., Moradi, M., & Rezaei, H. (2014). Pollution Haven and Foreign Direct Investment: Evidence from Selected Asian Countries. University of Economics in Bratislava, Journal of International Relations, XII(2), 111-124.
  • Nazlıoğlu, Ş. (2010). Makro iktisat politikalarının tarım sektörü üzerindeki etkileri: Gelişmiş ve gelişmekte olan ülkeler için bir karşılaştırma. Yayınlanmamış Doktora Tezi, TC Erciyes Üniversitesi Sosyal Bilimler Enstitüsü, Kayseri.
  • Nguyen, D. P. (2018). The relationship between foreign direct investment, economic growth and environmental pollution in Vietnam: An autoregressive distributed lags approach. International Journal of Energy Economics and Policy, 8(5), 138.
  • Nızıyımana, E., & Ünlü Ören, H. G. (2021). Sahra Altı Afrika Ülkelerinde Doğrudan Yabancı Yatırım, Çevre Kirliliği ve Nüfusun Refahı: Yeni Bir Ekonomik Refah Modeline Gerek Var mıdır?. Journal of Suleyman Demirel University Institute Of Social Sciences, (39).
  • Öztürk, S., & Saygin, S. (2020). Türkiye’de 1974-2016 Döneminde Yapısal Kırılma Altında Kişi Başına Reel Gelir, Doğrudan Yabancı Yatırımlar, Ticari Açıklık ve Karbon Emisyonları Arasındaki İlişki. Sosyoekonomi, 28(44), 69-90.
  • Park, J. Y. (1992). Canonical cointegrating regressions. Econometrica: Journal of the Econometric Society, 119-143.
  • Sadik-Zada, E. R., & Ferrari, M. (2020). Environmental policy stringency, technical progress and pollution haven hypothesis. Sustainability, 12(9), 3880.
  • Sarkodie, S. A., & Strezov, V. (2019). Effect of foreign direct investments, economic development and energy consumption on greenhouse gas emissions in developing countries. Science of the Total Environment, 646, 862-871.
  • Shao, Q., Wang, X., Zhou, Q., & Balogh, L. (2019). Pollution haven hypothesis revisited: a comparison of the BRICS and MINT countries based on VECM approach. Journal of Cleaner Production, 227, 724-738.
  • Shao, Q., Wang, X., Zhou, Q., & Balogh, L. (2019). Pollution haven hypothesis revisited: a comparison of the BRICS and MINT countries based on VECM approach. Journal of Cleaner Production, 227, 724-738.
  • Stock, J. H., & Watson, M. W. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica: journal of the Econometric Society, 783-820.
  • Sun, C., Zhang, F., & Xu, M. (2017). Investigation of pollution haven hypothesis for China: an ARDL approach with breakpoint unit root tests. Journal of cleaner production, 161, 153-164.
  • Tayyar, A. E. (2021). Doğrudan yabancı sermaye çıkışları ve çevresel kirlilik: Türkiye için saklı eşbütünleşme analizi. Pearson Journal of Socıal Scıences & Humanıtıes, 6(11):165-182.
  • Temurshoev, U. (2006). Pollution haven hypothesis or factor endowment hypothesis: theory and empirical examination for the US and China. CERGE-EI Working Paper, (292).
  • Wu, R., Ma, T., Chen, D., & Zhang, W. (2022). International trade, CO2 emissions, and re-examination of “Pollution Haven Hypothesis” in China. Environmental Science and Pollution Research, 29(3), 4375-4389.
  • Yilanci, V., Bozoklu, S., & Gorus, M. S. (2020). Are BRICS countries pollution havens? Evidence from a bootstrap ARDL bounds testing approach with a Fourier function. Sustainable Cities and Society, 55, 102035.

Doğrudan Yabancı Yatırımlar'ın Çevresel Kalite Üzerindeki Etkisi: Çin Örneği

Year 2022, Volume: 24 Issue: 3, 1249 - 1266, 28.12.2022
https://doi.org/10.26745/ahbvuibfd.1114672

Abstract

Çin 2018 yılında küresel fosil yakıt tüketiminin %24.57’sinden, küresel CO2 emisyonlarının %28.88’inden sorumlu olmuştur. Ayrıca Çin, çevre kalitesinin başka bir göstergesi olan ekolojik ayakizinde BRICS ülkeleri arasında 2018 yılında 1990 yılına göre %160.19 artışla en fazla çevre kalitesini olumsuz etkileyen ülke olmuştur. Dolayısıyla Çin’de çevre kirliliğini etkileyen faktörlerin belirlenmesi önem taşımaktadır. Bu çalışmanın amacı da 1990-2018 dönemi için Çin’de Doğrudan Yabancı Yatırım (DYY) girişlerinin kirliliği artırıcı mı yoksa azaltıcı mı olduğunu araştırmaktır. Bunun için kişi başı DYY girişi, kişi başı enerji kullanımı ve kişi başı CO2 emisyonu yıllık değişkenlerinin olduğu model kullanılmıştır. Değişkenler arasındaki uzun dönemli ilişkinin varlığı Fourier ADL yöntemiyle araştırılmıştır. Uzun dönem katsayı tahminleri için ise FMOLS, DOLS ve CCR kullanılmıştır. Elde edilen sonuçlara göre, Çin’de DYY girişleri ve enerji tüketimi CO2 emisyonunu azaltmaktadır. Böylece Çin için kirlilik Halo hipotezinin geçerli olduğu görülmüştür.

References

  • Akar, I. (2019). Kirlilik Cennetleri Hipotezi, Dış Ticaret ve Çevre İlişkisinin Literatür Araştırması. Economics Literature, 1(1), 37-50.
  • Asghari, M. (2013). Does FDI promote MENA region’s environment quality? Pollution halo or pollution haven hypothesis. Int J Sci Res Environ Sci, 1(6), 92-100.
  • Aslan, A., Altinoz, B., & Atay Polat, M. (2021). The nexus among climate change, economic growth, foreign direct investments, and financial development: New evidence from N‐11 countries. Environmental Progress & Sustainable Energy, 40(3), e13585.
  • Arı, A. (2021). Yenilenebilir Enerji ve Doğrudan Yabancı Yatırımlar: Türkiye Örneği. Karamanoğlu Mehmet Bey Üniversitesi Sosyal ve Ekonomik Araştırmalar Dergisi, 23(40), 122-131.
  • Bakirtas, I., & Cetin, M. A. (2017). Revisiting the environmental Kuznets curve and pollution haven hypotheses: MIKTA sample. Environmental Science and Pollution Research, 24(22), 18273-18283.
  • Banerjee, A., Dolado, J., & Mestre, R. (1998). Error‐correction mechanism tests for cointegration in a single‐equation framework. Journal of time series analysis, 19(3), 267-283.
  • Banerjee, P., Arčabić, V., & Lee, H. (2017). Fourier ADL cointegration test to approximate smooth breaks with new evidence from crude oil market. Economic Modelling, 67, 114-124.
  • Bao, Q., Chen, Y., & Song, L. (2011). Foreign direct investment and environmental pollution in China: a simultaneous equations estimation. Environment and Development Economics, 16(1), 71-92.
  • Bevan, A. A., & Estrin, S. (2004). The determinants of foreign direct investment into European transition economies. Journal of comparative economics, 32(4), 775-787.
  • Bozkaya, Ş. (2019) Doğrudan Yabancı Yatırımlar ve Kırlılık Sığınağı İlişkisi: Çin Örneğı. Studies, 5(11), 71-84.
  • Bulus, G. C., & Koc, S. (2021). The effects of FDI and government expenditures on environmental pollution in Korea: the pollution haven hypothesis revisited. Environmental Science and Pollution Research, 28(28), 38238-38253.
  • Chen, J. H., & Huang, Y. F. (2013). The study of the relationship between carbon dioxide (CO2) emission and economic growth. Journal of International and Global Economic Studies, 6(2), 45-61.
  • Dam, L., & Scholtens, B. (2012). The curse of the haven: The impact of multinational enterprise on environmental regulation. Ecological Economics, 78, 148-156.
  • Destek, M. A., & Okumus, I. (2019). Does pollution haven hypothesis hold in newly industrialized countries? Evidence from ecological footprint. Environmental Science and Pollution Research, 26(23), 23689-23695.
  • Dou, J., & Han, X. (2019). How does the industry mobility affect pollution industry transfer in China: Empirical test on Pollution Haven Hypothesis and Porter Hypothesis. Journal of cleaner production, 217, 105-115.
  • Dünya Bankası (2022). World development indicators online database. https://databank.worldbank.org/source/world-developmentindicators, (Erişim Tarihi: 6 Mayıs 2022).
  • Enders, W., & Lee, J. (2012). The flexible Fourier form and Dickey–Fuller type unit root tests. Economics Letters, 117(1), 196-199.
  • Fereidouni, H. G. (2013). Foreign direct investments in real estate sector and CO2 emission: Evidence from emerging economies. Management of Environmental Quality: An International Journal.
  • Hansen, B. E., & Phillips, P. C. (1988). Estimation and inference in models of cointegration: A simulation study.
  • He, J. (2006). Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces. Ecological Economics, 60(1), 228-245.
  • Hoffmann, R., Lee, C. G., Ramasamy, B., & Yeung, M. (2005). FDI and pollution: a granger causality test using panel data. Journal of International Development: The Journal of the Development Studies Association, 17(3), 311-317.
  • Internatıonal Energy Agency (IEA). (2022). Data and Statistics, https://www.iea.org, (Erişim Tarihi: 4 Mayıs 2022).
  • International Monetary Fund (IMF). (2015). World Economic Outlook, https://www.imf.org/external/pubs/ft/weo/2015/02/pdf/text.pdf, (Erişim Tarihi: 2 Mayıs 2022).
  • Jiang, L., Zhou, H. F., Bai, L., & Zhou, P. (2018). Does foreign direct investment drive environmental degradation in China? An empirical study based on air quality index from a spatial perspective. Journal of cleaner production, 176, 864-872.
  • Kearsley, A., & Riddel, M. (2010). A further inquiry into the pollution haven hypothesis and the environmental Kuznets curve. Ecological Economics, 69(4), 905-919.
  • Koçak, E., & Şarkgüneşi, A. (2018). The impact of foreign direct investment on CO2 emissions in Turkey: new evidence from cointegration and bootstrap causality analysis. Environmental Science and Pollution Research, 25(1), 790-804.
  • Liang, F. H. (2008). Does foreign direct investment harm the host country’s environment? Evidence from China. Evidence from China (Nov 28, 2008).
  • Liu, J., Qu, J., & Zhao, K. (2019). Is China's development conforms to the Environmental Kuznets Curve hypothesis and the pollution haven hypothesis?. Journal of Cleaner Production, 234, 787-796.
  • Manga, M., & Cengiz, O. (2020). Çevresel Kuznets Hipotezine Küreselleşme Eksenli Yaklaşım: Türki Cumhuriyetler Örneği. Süleyman Demirel Üniversitesi Vizyoner Dergisi, 11(28), 738-752.
  • Mark, N. C., & Sul, D. (2003). Cointegration vector estimation by panel DOLS and long‐run money demand. Oxford Bulletin of Economics and statistics, 65(5), 655-680.
  • Mehmood, B., Feliceo, A., & Shahid, A. (2014). What causes what? Aviation demand and economic growth in Romania: Cointegration estimation and causality analysis. Romanian Economic and B.
  • Nasrollahi, Z., Moradi, M., & Rezaei, H. (2014). Pollution Haven and Foreign Direct Investment: Evidence from Selected Asian Countries. University of Economics in Bratislava, Journal of International Relations, XII(2), 111-124.
  • Nazlıoğlu, Ş. (2010). Makro iktisat politikalarının tarım sektörü üzerindeki etkileri: Gelişmiş ve gelişmekte olan ülkeler için bir karşılaştırma. Yayınlanmamış Doktora Tezi, TC Erciyes Üniversitesi Sosyal Bilimler Enstitüsü, Kayseri.
  • Nguyen, D. P. (2018). The relationship between foreign direct investment, economic growth and environmental pollution in Vietnam: An autoregressive distributed lags approach. International Journal of Energy Economics and Policy, 8(5), 138.
  • Nızıyımana, E., & Ünlü Ören, H. G. (2021). Sahra Altı Afrika Ülkelerinde Doğrudan Yabancı Yatırım, Çevre Kirliliği ve Nüfusun Refahı: Yeni Bir Ekonomik Refah Modeline Gerek Var mıdır?. Journal of Suleyman Demirel University Institute Of Social Sciences, (39).
  • Öztürk, S., & Saygin, S. (2020). Türkiye’de 1974-2016 Döneminde Yapısal Kırılma Altında Kişi Başına Reel Gelir, Doğrudan Yabancı Yatırımlar, Ticari Açıklık ve Karbon Emisyonları Arasındaki İlişki. Sosyoekonomi, 28(44), 69-90.
  • Park, J. Y. (1992). Canonical cointegrating regressions. Econometrica: Journal of the Econometric Society, 119-143.
  • Sadik-Zada, E. R., & Ferrari, M. (2020). Environmental policy stringency, technical progress and pollution haven hypothesis. Sustainability, 12(9), 3880.
  • Sarkodie, S. A., & Strezov, V. (2019). Effect of foreign direct investments, economic development and energy consumption on greenhouse gas emissions in developing countries. Science of the Total Environment, 646, 862-871.
  • Shao, Q., Wang, X., Zhou, Q., & Balogh, L. (2019). Pollution haven hypothesis revisited: a comparison of the BRICS and MINT countries based on VECM approach. Journal of Cleaner Production, 227, 724-738.
  • Shao, Q., Wang, X., Zhou, Q., & Balogh, L. (2019). Pollution haven hypothesis revisited: a comparison of the BRICS and MINT countries based on VECM approach. Journal of Cleaner Production, 227, 724-738.
  • Stock, J. H., & Watson, M. W. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica: journal of the Econometric Society, 783-820.
  • Sun, C., Zhang, F., & Xu, M. (2017). Investigation of pollution haven hypothesis for China: an ARDL approach with breakpoint unit root tests. Journal of cleaner production, 161, 153-164.
  • Tayyar, A. E. (2021). Doğrudan yabancı sermaye çıkışları ve çevresel kirlilik: Türkiye için saklı eşbütünleşme analizi. Pearson Journal of Socıal Scıences & Humanıtıes, 6(11):165-182.
  • Temurshoev, U. (2006). Pollution haven hypothesis or factor endowment hypothesis: theory and empirical examination for the US and China. CERGE-EI Working Paper, (292).
  • Wu, R., Ma, T., Chen, D., & Zhang, W. (2022). International trade, CO2 emissions, and re-examination of “Pollution Haven Hypothesis” in China. Environmental Science and Pollution Research, 29(3), 4375-4389.
  • Yilanci, V., Bozoklu, S., & Gorus, M. S. (2020). Are BRICS countries pollution havens? Evidence from a bootstrap ARDL bounds testing approach with a Fourier function. Sustainable Cities and Society, 55, 102035.
There are 47 citations in total.

Details

Primary Language Turkish
Journal Section Main Section
Authors

Mustafa Naimoğlu 0000-0001-9684-159X

Publication Date December 28, 2022
Published in Issue Year 2022 Volume: 24 Issue: 3

Cite

APA Naimoğlu, M. (2022). Doğrudan Yabancı Yatırımlar’ın Çevresel Kalite Üzerindeki Etkisi: Çin Örneği. Ankara Hacı Bayram Veli Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 24(3), 1249-1266. https://doi.org/10.26745/ahbvuibfd.1114672