Investigation of the asymmetric effect of financial globalization on environmental pollution within the framework of the Kuznets Curve hypothesis: The case of Turkey

Various technological, industrial and financial developments over the years have brought the concept of globalization to the forefront. Financial globalization, one of the sub-branches of globalization, refers to the increasing integration of financial markets and capital movements in the world. The impact of globalization on environmental pollution has been investigated by many economists and multifaceted results have been obtained. The aim of this study is to examine the asymmetric impact of financial globalization on environmental pollution in the case of Turkey, a developing country. The annual data of the periods 1970-2020 are used as the data set in the study. In the study, first of all, the stationarity properties of the time series considered are analyzed using the ADF (Augmented Dickey-Fuller) unit root test. In the second stage, the long and short-run relationships among the variables are examined with the NARDL (Non-linear Autoregressive Distributed Lag) method. NARDL is a flexible model that evaluates both long-run cointegration relationships and short-run dynamics between time series. This method allows more comprehensive and realistic results to be obtained by considering the non-linear aspects of the interactions between variables. Thus, the scope of the research will be expanded and in-depth information will be provided about the long-run relationships of the variables. According to the results of the econometric analysis, the increase in financial globalization in Turkey leads to an increase in environmental pollution. Another finding is that the Environmental Kuznets Curve hypothesis, which examines the relationship between economic growth and environmental quality, is valid for Türkiye.