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Financial Development and Energy Consumption in Turkey: Empirical Evidence from Cointegration and Causality Tests

Financial Development and Energy Consumption in Turkey: Empirical Evidence from Cointegration and Causality Tests

Murat Çetin, Eyyup Ecevit, Fahri Seker, Davuthan Günaydin
Copyright: © 2015 |Pages: 18
ISBN13: 9781466674844|ISBN10: 1466674849|EISBN13: 9781466674851
DOI: 10.4018/978-1-4666-7484-4.ch018
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MLA

Çetin, Murat, et al. "Financial Development and Energy Consumption in Turkey: Empirical Evidence from Cointegration and Causality Tests." Handbook of Research on Behavioral Finance and Investment Strategies: Decision Making in the Financial Industry, edited by Zeynep Copur, IGI Global, 2015, pp. 297-314. https://doi.org/10.4018/978-1-4666-7484-4.ch018

APA

Çetin, M., Ecevit, E., Seker, F., & Günaydin, D. (2015). Financial Development and Energy Consumption in Turkey: Empirical Evidence from Cointegration and Causality Tests. In Z. Copur (Ed.), Handbook of Research on Behavioral Finance and Investment Strategies: Decision Making in the Financial Industry (pp. 297-314). IGI Global. https://doi.org/10.4018/978-1-4666-7484-4.ch018

Chicago

Çetin, Murat, et al. "Financial Development and Energy Consumption in Turkey: Empirical Evidence from Cointegration and Causality Tests." In Handbook of Research on Behavioral Finance and Investment Strategies: Decision Making in the Financial Industry, edited by Zeynep Copur, 297-314. Hershey, PA: IGI Global, 2015. https://doi.org/10.4018/978-1-4666-7484-4.ch018

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Abstract

This chapter investigates the cointegration and causal relationship between financial development and energy consumption in the case of Turkey over the period 1960-2011. In doing so, the ARDL bounds testing and Johansen-Juselius approaches to cointegration and Granger causality test based on vectorerror correction model are employed. The empirical results show that the series are cointegrated. The empirical results also show a positive and statistically significant relationship between financial development and energy consumption in the long run. In addition, a unidirectional causality running from financial development to energy consumption is found in the short and long run. Thus, this chapter provides an empirical evidence that financial development is a determinant of energy consumption in Turkey. This chapter also presents some implications for Turkey's energy policy.

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