Does Achieving Economic Complexity Impede Turkey's Environmental Sustainability?

Abstract

This chapter empirically examines the (asymmetric) impacts of economic complexity on Turkey's Ecological and Carbon Footprints by employing the augmented nonlinear autoregressive distributed lag (augmented NADL) method for the 1981-2017 period. This chapter's findings are as follows. First, nonlinear cointegration exists between economic complexity and environmental damage. Second, economic complexity has a significant long run asymmetric impact on Turkey's Ecological and Carbon Footprints. Third, in the long run, positive developments in economic complexity increase environmental damage in Turkey, whereas the impact of negative developments is insignificant on Turkey's environmental deterioration. Fourth, significant short run asymmetries regarding economic complexity's effect exist only in the Ecological Footprint model. Lastly, in the short run, positive developments in economic complexity decrease environmental damage, while negative developments intensify it. In line with the empirical findings, some policy recommendations are made.