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Financial Development, Renewable Energy Consumption And Industrial Output Relation: Testing Fourier Ardl For Turkey

Author

Listed:
  • Cüneyt KILIÇ

    (Çanakkale Onsekiz Mart University, Turkey)

  • Ahmet Tayfur AKCAN

    (Necmettin Erbakan University, Turkey)

  • Özgür TOPKAYA

    (Çanakkale Onsekiz Mart University, Turkey)

  • Müşerref ARIK

    (KTO Karatay University, Turkey)

Abstract

Energy plays a vital role in every aspect of the economy and in recent years renewable energy is highly debated for its pros and cons. While renewable energy consumption is important for sustainable growth and reduction of environmental damage it has some negative effects on the industrial production. The aim of the study is to examine the relationship between renewable energy consumption, financial development and industrial output for Turkey. Annual data between 1980 and 2019 were used in the study. Fractional Fourier Augmented Dickey-Fuller Unit Root Test and the Fourier Autoregressive Distributed Lag Bound Tests were used to analyze the relationship between variables. As a result of the study, a positive relationship was found between financial development and renewable energy consumption, while a negative relationship was found between industrial output and renewable energy consumption. Our empirical findings have important policy implications. According to these policy implications, the focus should be on a green-based economy with various subsidies, selective taxation procedures and incentive policies to increase the demand for renewable energy use.

Suggested Citation

  • Cüneyt KILIÇ & Ahmet Tayfur AKCAN & Özgür TOPKAYA & Müşerref ARIK, 2024. "Financial Development, Renewable Energy Consumption And Industrial Output Relation: Testing Fourier Ardl For Turkey," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 19(1), pages 97-117, April.
    • Handle: RePEc:blg:journl:v:19:y:2024:i:1:p:97-117
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    References listed on IDEAS

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    1. Paul Terhemba Iorember & Gideon G. Goshit & Dalis T. Dabwor, 2020. "Testing the nexus between renewable energy consumption and environmental quality in Nigeria: The role of broad‐based financial development," African Development Review, African Development Bank, vol. 32(2), pages 163-175, June.
    2. Anton, Sorin Gabriel & Afloarei Nucu, Anca Elena, 2020. "The effect of financial development on renewable energy consumption. A panel data approach," Renewable Energy, Elsevier, vol. 147(P1), pages 330-338.
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