Does pollution haven hypothesis hold in newly industrialized countries? Evidence from ecological footprint

This study aims to investigate the validity of pollution haven hypothesis for the period from 1982 to 2013 in ten newly industrialized countries. For this purpose, we examine the relationship between real income, foreign direct investment, energy consumption, and ecological footprint using second-generation panel data methodology to take into account the cross-sectional dependence among newly industrialized countries. In doing so, the possible nonlinear relationship between foreign direct investment and environmental degradation is also searched. The results show that increased energy consumption and economic growth lead to increase in ecological footprint. Moreover, the U-shaped relationship between foreign direct investment and ecological footprint is confirmed in newly industrialized countries.