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Journals / InTraders Uluslararası Ticaret Akademik Dergisi / 2026 / Volume: 9 Issue: 1

The Environmental Impacts of Capital Flows, Growth Rhythms, and Innovation: Findings from Türkiye

İbrahim Halil Polat(HAKKARI UNIVERSITY)0000-0001-9785-160X
Mahir Tosunoğlu(EGE UNIVERSITY)0000-0002-9941-0151
Muhamed Sabri Doğan0000-0002-7303-6915
Pages
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Publication Date
2026-07-30
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AI Summary & Key Takeaways

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⚡ TL;DR(Too Long; Didn't Read)

Using annual data for 1996–2023, the ARDL results indicate a stable long run relationship among the variables.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:This study examines how foreign direct investment (FDI), economic growth, and R&D based innovation affect carbon dioxide (CO₂) emissions in Türkiye, motivated by the rising prominence of cross-border capital mobility, technological change, and scale effects in environmental economics.
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Key Findings & Data:Using annual data for 1996–2023, the ARDL results indicate a stable long run relationship among the variables.
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Conclusion & Impact:Policy implications emphasize steering FDI toward cleaner sectors, strengthening energy efficiency, and accelerating green technologies to align economic modernization with sustainable development goals.
🔬Design:Research Article
📍Scope:2023 Verileri
⚙️Variables:Foreign direct investment · economic growth · innovation

Abstract

This study examines how foreign direct investment (FDI), economic growth, and R&D based innovation affect carbon dioxide (CO₂) emissions in Türkiye, motivated by the rising prominence of cross-border capital mobility, technological change, and scale effects in environmental economics. It contributes to the literature by (i) estimating long-run equilibrium and short-run adjustment jointly within an ARDL bounds testing and error-correction (ECM) framework, rather than relying on single-period averages; (ii) showing that innovation, when coupled with energy-intensive production expansion, may raise emissions; and (iii) linking the environmental impact of FDI to its qualitative and sectoral composition, informing the pollution haven pollution halo debate for Türkiye. Using annual data for 1996–2023, the ARDL results indicate a stable long run relationship among the variables. Long-run estimates reveal that higher FDI inflows, faster economic growth, and greater R&D expenditures are associated with higher CO₂ emissions. These findings are corroborated by alternative robustness estimators. Short-run dynamics from the ECM suggest that deviations from the long-run path are corrected relatively quickly, with the system returning to equilibrium in about 16 months. To clarify directionality, the Toda–Yamamoto causality test detects unidirectional causality running from FDI, economic growth, and innovation to CO₂ emissions. Overall, the evidence implies that Türkiye’s development trajectory has remained carbon intensive and that growth and investment strategies designed without explicit sustainability constraints can increase carbon intensity. Policy implications emphasize steering FDI toward cleaner sectors, strengthening energy efficiency, and accelerating green technologies to align economic modernization with sustainable development goals.

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Cite This Article

Polat, İ. H., Tosunoğlu, M., Doğan, M. S. (2026). The Environmental Impacts of Capital Flows, Growth Rhythms, and Innovation: Findings from Türkiye. InTraders Uluslararası Ticaret Akademik Dergisi, Volume: 9 Issue: 1. https://doi.org/10.55065/intraders.1880290

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