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In this paper, we investigate the phenomenon of flypaper effect and its relation to the local tax effort, by using a new and detailed panel data set that consist of all province and district municipalities' fiscal data in Turkey between 1997 and 2005. We use fixed effects and dynamic panel data specific GMM estimators to obtain the results. We provide new evidence using an advanced technique which is firstly used to uncover flypaper effect in Turkey. According to our estimations, the flypaper effect does exist for the Turkish municipalities. This result is robust to various model specifications and econometric techniques. Turkish municipalities also experience substitution effect of unconditional grants on the revenue collection efforts.

The purpose of this study was to determine the relevance of the Environmental Kuznets Curve, which shows that there is an inverted-U shaped relationship between environmental pollution and economic growth. We investigated the relationship between per capita income and the carbon dioxide emissions as indicators of environmental pollution in Developing Countries, OECD, Middle East and OPEC countries for the period of 1970-2016. The contribution of our study is the evaluation and comparison of Developing Countries, OECD, Middle East and OPEC countries together in the context of EKC. We employ the fixed effect and GMM techniques in this study and results obtained from cubic models indicate that the N-shaped relationship for Developing, Middle East countries and OECD countries and inverted N-shaped relationship for OPEC countries exist. Considering these conclusions, we draw some serious policy implications for the policy makers in these countries. Governments should closely follow the industries that generate CO2 emissions as after some point environmental degradation increases again as income increases. In addition adopting clean energies including wind and solar systems and making these technologies widespread across countries might reduce CO2 emissions. Another alternative way to reduce CO2 emissions might be a carbon tax which should be implemented for polluters.

In this study, we reexamine the impact of foreign direct investment inflows on carbon emissions in middle-income and OECD countries over the period 1992–2017. For that purpose, we employ a two-step system GMM dynamic panel data estimator controlling for endogeneity, omitted variable, and simultaneity biases in our panels. Employing a dynamic panel estimation methodology, we introduced some new findings and believe that these have important policy implications. The empirical results from the analyses show that FDI increases carbon emissions in middle-income countries and provide evidence of the pollution haven hypothesis in developing countries. Our findings suggest that FDI has a small halo effect on advanced economies. Our study also provides evidence of the Environmental Kuznets Curve hypothesis as we consistently find an inverted-U-shaped relationship between carbon emissions and per capita income across different panel samples. Policymakers planning to attract FDI in middle-income countries should do a cost-benefit analysis by considering its damage to the environment and its positive impact on economic growth.

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