Pollution haven or pollution halo in the fishing footprint: Evidence from Indonesia

Abstract

This study tests the pollution halo/haven hypothesis and the environmental Kuznets curve (EKC) in Indonesia by considering the fishing footprint (FF) as the environmental degradation indicator over the period 1976-2018. The results provide evidence of the validity of the pollution halo hypothesis and the EKC. Besides, we found that trade openness in the fishery sector harms the FF. These results have important policy implications for Indonesia. (i) Foreign Direct Investment (FDI) positively affects the fishing environment, which may be due to the beneficial implications of the FDI in the fishery sector via modern management techniques, cutting-edge technologies, increased productivity, and know-how transfers. (ii) The validity of the EKC hypothesis with the estimated turning point of 4579.513 US Dollars indicates that the Indonesian fishing environment deteriorates till the per capita GDP level reaches 4579.513 and then improves after this point. (iii) Increased free trade in fishery products contributes to environmental quality.