The Relationship of Export, Foreign Direct Investment, Economic Growth and Carbon Emission in Turkey

In recent years, liberalization of trade and rapid industrialization activities have increased Turkey's share in carbon dioxide CO2 emissions and global warming, like other emerging market economies. In this context, the research carried out and the measures to be taken are very important for future generations. The aim of this study is to test the effects of exports, foreign direct investments (FDI), and gross domestic product (GDP) on environmental pollution in Turkey. Additionally, the change in the competitiveness of the export of dirty sectors in Turkey in recent years has been examined in the study. In this context, two separate analyzes were carried out. Firstly, the competitiveness in the export of dirty sectors between 1995-2019 was calculated using Balassa (1965)'s Revealed Comparative Advantage (RCA) Index. It has been determined that Turkey has a comparative advantage in iron-steel, non-metallic minerals, and paper sectors. In the second stage, the ARDL bound test for the existence of a long-term relationship between exports, FDI, GDP, and CO2 emissions between 1974-2019 in Turkey, and the Toda-Yamamoto causality test was applied to determine the direction of the relationship between the variables. According to the findings, exports have a statistically significant effect on CO2 emissions. On the other hand, no strong link and causality relationship was found between FDI and CO2 emissions.