Research Article
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Financial Development and Energy Consumption Nexus in Turkey: Fourier Approach

Year 2021, Volume: 9 Issue: 5, 1279 - 1290, 25.10.2021
https://doi.org/10.18506/anemon.891808

Abstract

Financial development has become an important component of economic growth, along with financial markets that have recently reached huge volumes as a result of globalization. This situation has led to an increase in studies investigating the relationship between financial development and energy use. This study aims to investigate the effect of financial development on the energy consumption for Turkey. In the analyzes, structural breaks are taken into account by models using Fourier functions. The Fourier approach can be used to capture unknown structural breaks or neglected nonlinearity in the deterministic component of the model. The stationarity feature of the series is tested using the Fourier ADF unit root test. All variables are found to be stationary at the first level and Fourier ADL cointegration analysis is performed. A long-term positive significant relationship is found between variables. In addition, by performing the Fourier causality analysis, it is concluded that there is a one-way causality relationship from financial development to energy consumption and from energy consumption to inflation rate. The findings of this study, which is conducted considering the structural changes, contain similar results to the studies in the literature.

References

  • Alam S. & Butt, M., S. (2002). Causality between energy consumption and economic growth in Pakistan: An application of co-integration and error correction modelling techniques. Pacific and Asian Journal of Energy, 12(2), 151-165.
  • Al-Iriani, M. (2006). Energy–GDP relationship revisited: An example from GCC countries using panel causality. Energy Policy, 34, 3342–3350.
  • Banerjee, P., Arčabić, V., & Lee, H. (2017). Fourier ADL cointegration test to approximate smooth breaks with new evidence from crude oil market. Economic Modelling, 67, 114-124.
  • Batliwala, S. & Reddy, A., K. (1993). Energy consumption and population. International Energy Initiative, 25/5 Borebank Road, Benson Town, Bangalore, India. 1-10. BP Statistical Review of World Energy, 2019.
  • Burakov, D. & Freidin, M. (2017). Financial development, economic growth and renewable energy consumption in Russia: A vector error correction approach. International Journal of Energy Economics and Policy, 7, 39–47.
  • Çağlar, E., E. & Kubar, Y. (2017). Finansal gelişme enerji tüketimini destekler mi?. Süleyman Demirel Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 27(2), 96-121.
  • Çetin, M. (2018). Türkiye’de finansal gelişme ve enerji tüketimi ilişkisi: Bir zaman serisi kanıtı. Eskişehir Osmangazi Üniversitesi İİBF Dergisi, 13(3), 69-88.
  • Christopoulos, D. K., & León-Ledesma, M. A. (2010). Smooth breaks and non-linear mean reversion: Post-Bretton Woods real exchange rates. Journal of International Money and Finance, 29(6), 1076-1093.
  • Çiftçi, D., D., Soytaş, U., & Nazlıoğlu, Ş. (2020). Financial development and energy consumption in emerging markets: Smooth structural shifts and causal linkages. Energy Economics, 87, 1-17.
  • Çoban, S. & Topçu, M. (2013). The nexus between financial development and energy consumption in the EU: A dynamic panel data analysis. Energy Economics, 39, 81-88.
  • Danish, Saud, S., Baloch, M., A. & Lodhi, R., N (2018). The nexus between energy consumption and financial development: estimating the role of globalization in Next-11 countries. Environmental Science and Pollution Research, 25, 18651-18661.
  • Denisova, V. (2020). Financial development and energy consumption: evidence from Germany. International Journal of Energy Economics and Policy, 10(2), 35-39.
  • Erol U. & Yu, E., S., H. (1987). On the causal relationship between energy and income for industrialized countries. Journal of Energy and Development, 13, 113-122.
  • Farhani, S. & Solarin, S.A. (2017).Financial development and energy demand in the United States: New evidencefrom combined cointegartion and asymmetric causality tests. Energy, 134, 1029–1037.
  • Furuoka, F. (2015). Financial development and energy consumption: Evidence from a heterogeneous panel of Asian countries. Renewable and Sustainable Energy Reviews, 52, 430-444.
  • Gomez, M. & Rodriquez, J. C. (2019). Energy consumption and financial development in NAFTA countries, 1971–2015. Applied Sciences, 9(2), 302.
  • Hwang D. & Gun, B. (1992). The causal relationship between energy and GNP: the case of Taiwan. Journal of Energy and Development, 16, 219-226.
  • International Energy Agency. Energy policy review, 2021.
  • Jones, P. M. & Enders, W., (2014). On the use of the flexible Fourier form in unit root tests, endogenous breaks, and parameter instability, In Recent Advances in Estimating Nonlinear Models Springer, New York, NY, 59-83.
  • Kakar, Z., K., Khilji, B., A. & Khan, M., J. (2011). Financial development and energy consumption: Empirical evidence from Pakistan, International Journal of Trade, Economics and Finance, 2(6), 469-471.
  • Keskingöz, H. & İnançlı, S. (2016). Türkiye’de finansal gelişme ve enerji tüketimi arasında nedensellik ilişkisi: 1960-2011. Eskişehir Osmangazi Üniversitesi İİBF Dergisi, 11(3), 101-114.
  • Kraft, J. & Kraft, A. (1978). On the relationship between energy and GNP. Journal of Energy and Development, 3, 401-403.
  • Kurt, Ü. (2019). Türkiye ekonomisinde finansal gelişme, enerji tüketimi ve ekonomik büyüme ilişkisi. Turkish Studies, 14(2), 599-614.
  • Mahalik, M., K., Babu, M., S., Loganathan, N. & Shahbaz, M. (2017). Does financial development intensify energy consumption in Saudi Arabia?. Renewable and Sustainable Energy Reviews, 75, 1022-1034.
  • Mielnik, O. & Goldemberg, J. (2002). Foreign direct investment and decoupling between energy and gross domestic product in developing countries. Energy Policy, 30(2), 87–89.
  • Mikhaylov, A. Y. (2018). Pricing in oil market and using probit model for analysis of stock market effects. International Journal of Energy Economics and Policy, 8(2), 69-73.
  • Mikhaylov, А., Sokolinskaya, N. & Nyangarika, А. (2018). Optimal carry trade strategy based on currencies of energy and developed economies. Journal of Reviews on Global Economics, 7, 582-592.
  • Mukhtarov, S., Humbatova, S., Seyfullayev, I., & Kalbiyev, Y. (2020). The effect of financial development on energy consumption in the case of Kazakhstan. Journal of Applied Economics, 23(1), 75-88.
  • Nazlioglu, S., Gormus, N. A., & Soytas, U. (2016). Oil prices and real estate investment trusts (REITs): Gradual-shift causality and volatility transmission analysis. Energy Economics, 60, 168-175.
  • Ouyang, Y. & Li, P. (2018). On the nexus of financial development, economic growth, and energy consumption in China: New perspective from a GMM panel VAR approach. Energy Economics, 71–252.
  • Perron, P., (1989).The great crash, the oil price shock, and the unit root hypothesis. Econometrica: Journal of the Econometric Society, 1361-1401.
  • Sadorsky, P. (2010). The impact of financial development on energy consumption in emerging economies. Energy Policy, 38, 2528-2535.
  • Sadorsky, P. (2011). Financial development and energy consumption in Central and Eastern European frontier economies. Energy Policy, 39(2), 999–1006.
  • Shahbaz, M., Hoang, T., H., V., Mahalik, M., K. & Roubaud, D. (2017). Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis. Energy Economics, 63, 199-212.
  • Shahbaz, M. & Lean, H., H. (2012). Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia. Energy Policy, 40, 473-479.
  • Stock, J. H. & Watson, M. W. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica. Journal of the Econometric Society, 61(4), 783-820.

Türkiye’de Finansal Gelişme ve Enerji Tüketimi İlişkisi: Fourier Yaklaşımı

Year 2021, Volume: 9 Issue: 5, 1279 - 1290, 25.10.2021
https://doi.org/10.18506/anemon.891808

Abstract

Son zamanlarda küreselleşmenin bir sonucu olarak büyük hacimlere ulaşan finansal piyasalar ile birlikte gerçekleşen finansal gelişme ekonomik büyümenin önemli bir bileşeni haline gelmiştir. Bu durum finansal gelişme ile enerji kullanımı arasındaki ilişkiyi araştıran çalışmaların artmasına neden olmuştur. Bu çalışmada Türkiye için finansal gelişmişliğin enerji tüketimi üzerindeki etkisinin incelenmesi amaçlanmıştır. Yapılan analizlerde yapısal değişimler Fourier fonksiyonlarını temel alan modeller kullanılarak göz önünde bulundurulmuştur. Fourier yaklaşımı, ele alınan modelin deterministik bileşeninde bilinmeyen yapısal kırılmaları veya göz ardı edilen doğrusal olmama durumunu yakalamak için kullanılabilmektedir. Çalışmada kullanılan serilerin durağanlık özelliği Fourier ADF birim kök testi kullanılarak araştırılmıştır. Birim kök testi sonuçlarına göre değişkenlerin hepsi birinci seviyeden durağan bulunmuştur ve Fourier ADL eşbütünleşme analizi yapılmıştır. Değişkenler arasında uzun dönemli pozitif anlamlı ilişkiye rastlanmıştır. Ayrıca değişkenler arasında Fourier nedensellik analizi yapılarak finansal gelişmeden enerji tüketimine ve enerji tüketiminden enflasyon oranına doğru tek yönlü nedensellik ilişkisi olduğu sonucuna ulaşılmıştır. Yapısal değişimler dikkate alınarak yapılan bu çalışmanın bulguları literatürdeki çalışmalarla benzer sonuçlar içermektedir.

References

  • Alam S. & Butt, M., S. (2002). Causality between energy consumption and economic growth in Pakistan: An application of co-integration and error correction modelling techniques. Pacific and Asian Journal of Energy, 12(2), 151-165.
  • Al-Iriani, M. (2006). Energy–GDP relationship revisited: An example from GCC countries using panel causality. Energy Policy, 34, 3342–3350.
  • Banerjee, P., Arčabić, V., & Lee, H. (2017). Fourier ADL cointegration test to approximate smooth breaks with new evidence from crude oil market. Economic Modelling, 67, 114-124.
  • Batliwala, S. & Reddy, A., K. (1993). Energy consumption and population. International Energy Initiative, 25/5 Borebank Road, Benson Town, Bangalore, India. 1-10. BP Statistical Review of World Energy, 2019.
  • Burakov, D. & Freidin, M. (2017). Financial development, economic growth and renewable energy consumption in Russia: A vector error correction approach. International Journal of Energy Economics and Policy, 7, 39–47.
  • Çağlar, E., E. & Kubar, Y. (2017). Finansal gelişme enerji tüketimini destekler mi?. Süleyman Demirel Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 27(2), 96-121.
  • Çetin, M. (2018). Türkiye’de finansal gelişme ve enerji tüketimi ilişkisi: Bir zaman serisi kanıtı. Eskişehir Osmangazi Üniversitesi İİBF Dergisi, 13(3), 69-88.
  • Christopoulos, D. K., & León-Ledesma, M. A. (2010). Smooth breaks and non-linear mean reversion: Post-Bretton Woods real exchange rates. Journal of International Money and Finance, 29(6), 1076-1093.
  • Çiftçi, D., D., Soytaş, U., & Nazlıoğlu, Ş. (2020). Financial development and energy consumption in emerging markets: Smooth structural shifts and causal linkages. Energy Economics, 87, 1-17.
  • Çoban, S. & Topçu, M. (2013). The nexus between financial development and energy consumption in the EU: A dynamic panel data analysis. Energy Economics, 39, 81-88.
  • Danish, Saud, S., Baloch, M., A. & Lodhi, R., N (2018). The nexus between energy consumption and financial development: estimating the role of globalization in Next-11 countries. Environmental Science and Pollution Research, 25, 18651-18661.
  • Denisova, V. (2020). Financial development and energy consumption: evidence from Germany. International Journal of Energy Economics and Policy, 10(2), 35-39.
  • Erol U. & Yu, E., S., H. (1987). On the causal relationship between energy and income for industrialized countries. Journal of Energy and Development, 13, 113-122.
  • Farhani, S. & Solarin, S.A. (2017).Financial development and energy demand in the United States: New evidencefrom combined cointegartion and asymmetric causality tests. Energy, 134, 1029–1037.
  • Furuoka, F. (2015). Financial development and energy consumption: Evidence from a heterogeneous panel of Asian countries. Renewable and Sustainable Energy Reviews, 52, 430-444.
  • Gomez, M. & Rodriquez, J. C. (2019). Energy consumption and financial development in NAFTA countries, 1971–2015. Applied Sciences, 9(2), 302.
  • Hwang D. & Gun, B. (1992). The causal relationship between energy and GNP: the case of Taiwan. Journal of Energy and Development, 16, 219-226.
  • International Energy Agency. Energy policy review, 2021.
  • Jones, P. M. & Enders, W., (2014). On the use of the flexible Fourier form in unit root tests, endogenous breaks, and parameter instability, In Recent Advances in Estimating Nonlinear Models Springer, New York, NY, 59-83.
  • Kakar, Z., K., Khilji, B., A. & Khan, M., J. (2011). Financial development and energy consumption: Empirical evidence from Pakistan, International Journal of Trade, Economics and Finance, 2(6), 469-471.
  • Keskingöz, H. & İnançlı, S. (2016). Türkiye’de finansal gelişme ve enerji tüketimi arasında nedensellik ilişkisi: 1960-2011. Eskişehir Osmangazi Üniversitesi İİBF Dergisi, 11(3), 101-114.
  • Kraft, J. & Kraft, A. (1978). On the relationship between energy and GNP. Journal of Energy and Development, 3, 401-403.
  • Kurt, Ü. (2019). Türkiye ekonomisinde finansal gelişme, enerji tüketimi ve ekonomik büyüme ilişkisi. Turkish Studies, 14(2), 599-614.
  • Mahalik, M., K., Babu, M., S., Loganathan, N. & Shahbaz, M. (2017). Does financial development intensify energy consumption in Saudi Arabia?. Renewable and Sustainable Energy Reviews, 75, 1022-1034.
  • Mielnik, O. & Goldemberg, J. (2002). Foreign direct investment and decoupling between energy and gross domestic product in developing countries. Energy Policy, 30(2), 87–89.
  • Mikhaylov, A. Y. (2018). Pricing in oil market and using probit model for analysis of stock market effects. International Journal of Energy Economics and Policy, 8(2), 69-73.
  • Mikhaylov, А., Sokolinskaya, N. & Nyangarika, А. (2018). Optimal carry trade strategy based on currencies of energy and developed economies. Journal of Reviews on Global Economics, 7, 582-592.
  • Mukhtarov, S., Humbatova, S., Seyfullayev, I., & Kalbiyev, Y. (2020). The effect of financial development on energy consumption in the case of Kazakhstan. Journal of Applied Economics, 23(1), 75-88.
  • Nazlioglu, S., Gormus, N. A., & Soytas, U. (2016). Oil prices and real estate investment trusts (REITs): Gradual-shift causality and volatility transmission analysis. Energy Economics, 60, 168-175.
  • Ouyang, Y. & Li, P. (2018). On the nexus of financial development, economic growth, and energy consumption in China: New perspective from a GMM panel VAR approach. Energy Economics, 71–252.
  • Perron, P., (1989).The great crash, the oil price shock, and the unit root hypothesis. Econometrica: Journal of the Econometric Society, 1361-1401.
  • Sadorsky, P. (2010). The impact of financial development on energy consumption in emerging economies. Energy Policy, 38, 2528-2535.
  • Sadorsky, P. (2011). Financial development and energy consumption in Central and Eastern European frontier economies. Energy Policy, 39(2), 999–1006.
  • Shahbaz, M., Hoang, T., H., V., Mahalik, M., K. & Roubaud, D. (2017). Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis. Energy Economics, 63, 199-212.
  • Shahbaz, M. & Lean, H., H. (2012). Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia. Energy Policy, 40, 473-479.
  • Stock, J. H. & Watson, M. W. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica. Journal of the Econometric Society, 61(4), 783-820.
There are 36 citations in total.

Details

Primary Language Turkish
Journal Section Research Article
Authors

Fatma Kızılkaya 0000-0002-1028-9341

Esra Canpolat Gökçe 0000-0003-1447-7267

Publication Date October 25, 2021
Acceptance Date June 2, 2021
Published in Issue Year 2021 Volume: 9 Issue: 5

Cite

APA Kızılkaya, F., & Canpolat Gökçe, E. (2021). Türkiye’de Finansal Gelişme ve Enerji Tüketimi İlişkisi: Fourier Yaklaşımı. Anemon Muş Alparslan Üniversitesi Sosyal Bilimler Dergisi, 9(5), 1279-1290. https://doi.org/10.18506/anemon.891808

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