Validity of the Environmental Kuznets Curve and pollution haven hypotheses in developing

Since the second half of the 19th century, the rapidly increasing industrialization and globalization processes have increased the global aggregate demand. The increasing need for production has led to the intensive use of natural resources on a global scale. In particular, the excessive use of fossil-based natural resources in the production processes has put pressure on the environmental quality levels of countries. In the economic literature, there are two important approaches regarding the possible environmental problems caused by the increase in the total supply level, which is the cornerstone of the economic development process. The first approach is called the Environmental Kuznets Curve Hypothesis (EKC), and the other is called the Pollution Haven Hypothesis (PHH). According to the EKC hypothesis, policy makers and societies focus on increasing the level of material output in the early stages of development. However, after a certain turning point, the increasing economic growth process creates an increas in environmental quality. This inverted U-shaped curve between growth and pollution has been defined as the EKC. According to PHH, developed countries, where regulations on environmental protection are quite strict, shift their industries producing with dirty techniques to developing countries where environmental regulations and constraints are relatively loose. The aim of this thesis is to examine the validity of the EKC and PHH hypotheses for 55 developing countries between 1991 and 2017 with the help of static and dynamic panel data techniques. Static and dynamic panel data estimator results revealed that the EKC and PHH hypotheses are valid in developing countries. In addition, heterogeneous panel causality test findings showed that there is a causal relationship from per capita income, urban population, electricity consumption and foreign direct investment to carbon dioxide emissions per capita.