Abstract

PEREZ VAZQUEZ, José Imanol  and  VALDES IGLESIAS, Edson. Foreign direct investment, the secondary sector, and environmental degradation at a state level: A long-term estimate. Rev. econ. [online]. 2026, vol.43, n.106, pp.146-176.  Epub Mar 12, 2026. ISSN 2395-8715.  https://doi.org/10.33937/reveco.2026.530.

The objective of this study is to analyze the relationship between equivalent carbon dioxide emissions and economic activities through the Environmental Kuznets Curve hypothesis and the Haven Pollution hypothesis for the states of Mexico, based on data from 1989 to 2018. Panel data and regression analysis using CS-ARDL and CS-DL were used. Gross Domestic Product, Secondary Gross Domestic Product, and foreign direct investment were used as independent variables, all measured in real per capita terms. The empirical evidence revealed an inverted "U" shaped relationship, which is why the Environmental Kuznets Curve hypothesis is accepted. The Haven Pollution hypothesis was rejected at the national level, considering the differences between the states; no relationship was found between the independent variables and emissions at the individual level for each state. This study’s originality lies in considering the dependence and heterogeneity among the states of Mexico, using second-generation econometric techniques and unexplored databases, covering a gap in the literature on regional-level studies. The main conclusion is that economic activity alone shows evidence of reducing environmental degradation, and environmental policies must consider heterogeneity among states to reduce emissions.

Keywords : Environmental Kuznets curve; pollution haven hypothesis; environmental econometrics; greenhouse gases.

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