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Relationship between Financial Development and Energy Consumption: The Case of Turkey

Author

Listed:
  • Bülent Altay

    (Afyon Kocatepe University, Department of Economics)

  • Mert Topcu

    (Nevsehir Haci Bektas Veli University, Department of Economics)

Abstract

This paper examines the relationship between financial development and energy consumption in Turkey over the period 1980-2011 adopting cointegration and causality methodologies. Cointegration results indicate that there is no long run relation among the variables. Causality results, on the other hand, indicate that energy-finance nexus supports neutrality hypothesis in Turkey in the short run. The inconsistency across the papers in the case of Turkey clearly addresses the fact that it does really matter which financial development indicators are proxied.

Suggested Citation

  • Bülent Altay & Mert Topcu, 2015. "Relationship between Financial Development and Energy Consumption: The Case of Turkey," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 3(1), pages 18-24, March.
    • Handle: RePEc:ijr:beejor:v:3:y:2015:i:1:p:18-24
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    Citations

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    Cited by:

    1. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    2. Lin, Boqiang & Okoye, Jude O., 2023. "Towards renewable energy generation and low greenhouse gas emission in high-income countries: Performance of financial development and governance," Renewable Energy, Elsevier, vol. 215(C).
    3. Benkraiem, Ramzi & Lahiani, Amine & Miloudi, Anthony & Shahbaz, Muhammad, 2019. "The asymmetric role of shadow economy in the energy-growth nexus in Bolivia," Energy Policy, Elsevier, vol. 125(C), pages 405-417.
    4. Kazemzadeh, Emad & Fuinhas, José Alberto & Koengkan, Matheus & Shadmehri, Mohammad Taher Ahmadi, 2023. "Relationship between the share of renewable electricity consumption, economic complexity, financial development, and oil prices: A two-step club convergence and PVAR model approach," International Economics, Elsevier, vol. 173(C), pages 260-275.
    5. Wang, You & Gong, Xu, 2020. "Does financial development have a non-linear impact on energy consumption? Evidence from 30 provinces in China," Energy Economics, Elsevier, vol. 90(C).
    6. Mukhtarov, Shahriyar & Yüksel, Serhat & Dinçer, Hasan, 2022. "The impact of financial development on renewable energy consumption: Evidence from Turkey," Renewable Energy, Elsevier, vol. 187(C), pages 169-176.
    7. Mehmet Akif Destek, 2015. "Energy Consumption, Economic Growth, Financial Development and Trade Openness in Turkey: Maki Cointegration Test," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 3(4), pages 162-168, December.
    8. Ahmed, Khalid, 2017. "Revisiting the role of financial development for energy-growth-trade nexus in BRICS economies," Energy, Elsevier, vol. 128(C), pages 487-495.
    9. Tii N. Nchofoung & Nathanael Ojong, 2023. "Natural resources, renewable energy, and governance: A path towards sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1553-1569, June.
    10. Yilmaz Bayar & Mehmet Hilmi Ozkaya & Laura Herta & Marius Dan Gavriletea, 2021. "Financial Development, Financial Inclusion and Primary Energy Use: Evidence from the European Union Transition Economies," Energies, MDPI, vol. 14(12), pages 1-14, June.
    11. 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.
    12. Noh, Nadia Mohd & Masih, Mansur, 2017. "The relationship between energy consumption and economic growth: evidence from Thailand based on NARDL and causality approaches," MPRA Paper 86384, University Library of Munich, Germany.
    13. Uddin, Md. Kamal & Pan, Xiongfeng & Saima, Umme & Zhang, Chengming, 2022. "Influence of financial development on energy intensity subject to technological innovation: Evidence from panel threshold regression," Energy, Elsevier, vol. 239(PD).
    14. Alina Zaharia & Maria Claudia Diaconeasa & Laura Brad & Georgiana-Raluca Lădaru & Corina Ioanăș, 2019. "Factors Influencing Energy Consumption in the Context of Sustainable Development," Sustainability, MDPI, vol. 11(15), pages 1-28, August.
    15. Pan, Xiongfeng & Uddin, Md. Kamal & Saima, Umme & Guo, Shucen & Guo, Ranran, 2019. "Regime switching effect of financial development on energy intensity: Evidence from Markov-switching vector error correction model," Energy Policy, Elsevier, vol. 135(C).
    16. Roubaud, David & Shahbaz, Muhammad, 2018. "Financial Development, Economic Growth, and Electricity Demand: A Sector Analysis of an Emerging Economy," MPRA Paper 87212, University Library of Munich, Germany, revised 06 Jun 2018.

    More about this item

    Keywords

    Financial Development; Energy Consumption;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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