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Testing the EKC hypothesis by considering trade openness, urbanization, and financial development: the case of Turkey

Environmental Science and Pollution Research volume 24, pages 16690–16701 (2017)Cite this article

Abstract

This study investigates the environmental Kuznets curve (EKC) hypothesis for the case of Turkey from 1960 to 2013 by considering energy consumption, trade, urbanization, and financial development variables. Although previous literature examines various aspects of the EKC hypothesis for the case of Turkey, our model augments the basic model with several covariates to develop a better understanding of the relationship among the variables and to refrain from omitted variable bias. The results of the bounds test and the error correction model under autoregressive distributed lag mechanism suggest long-run relationships among the variables as well as proof of the EKC and the scale effect in Turkey. A conditional Granger causality test reveals that there are causal relationships among the variables. Our findings can have policy implications including the imposition of a “polluter pays” mechanism, such as the implementation of a carbon tax for pollution trading, to raise the urban population’s awareness about the importance of adopting renewable energy and to support clean, environmentally friendly technology.

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Fig. 1
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Notes

  1. For other classifications, see Ahmad et al. (2016) and Dogan and Seker (2016).

  2. To investigate the applied unit root, we also applied ADF, PP, and KPSS tests. However, to save space, we are only reporting ZA test results.

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  1. Department of Banking and Finance, Eastern Mediterranean University, North Cyprus via Mersin 10, Famagusta, Turkey

    Nesrin Ozatac, Korhan K. Gokmenoglu & Nigar Taspinar

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  1. Nesrin Ozatac
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  2. Korhan K. Gokmenoglu
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  3. Nigar Taspinar
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Correspondence to Nigar Taspinar.

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Ozatac, N., Gokmenoglu, K.K. & Taspinar, N. Testing the EKC hypothesis by considering trade openness, urbanization, and financial development: the case of Turkey. Environ Sci Pollut Res 24, 16690–16701 (2017). https://doi.org/10.1007/s11356-017-9317-6

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  • DOI: https://doi.org/10.1007/s11356-017-9317-6

Keywords

  • Air pollution
  • International trade
  • Urbanization
  • Causality

Jel codes

  • Q53
  • F18
  • R10
  • C19