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The Relationship between Geothermal Energy Consumption, Foreign Direct Investment, and Economic Growth in Geothermal Consumer Countries: Evidence from Panel Fourier Causality Test

Author

Listed:
  • Feyyaz Zeren

    (Department of International Trade and Finance, Faculty of Economics and Administrative Sciences, Yalova University, Yalova 77200, Turkey)

  • Nazlıgül Gülcan

    (Department of Accounting and Finance, Bucak Faculty of Business Administration, Burdur Mehmet Akif Ersoy University, Burdur 15300, Turkey)

  • Samet Gürsoy

    (Department of Customs Business Administration, Bucak Zeliha Tolunay School of Applied Technology and Business Administration, Burdur Mehmet Akif Ersoy University, Burdur 15300, Turkey)

  • İbrahim Halil Ekşi

    (Department of Business, Faculty of Economics and Administrative Sciences, Gaziantep University, Gaziantep 27000, Turkey)

  • Mosab I. Tabash

    (College of Business, Al Ain University, Al Ain 64141, United Arab Emirates)

  • Magdalena Radulescu

    (Department of Finance, Accounting, and Economics, University of Pitesti, 110040 Pitesti, Romania
    Institute of Doctoral and Post-Doctoral Studies, University Lucian Blaga of Sibiu, 550024 Sibiu, Romania)

Abstract

This paper investigates the relationship between geothermal energy consumption, economic growth, and foreign direct investments in countries where geothermal energy production is possible. Panel Fourier Granger causality and panel Fourier Toda–Yamamoto causality tests (2020–2021) were applied, which can take into account smooth transitional structural breaks with trigonometric functions using quarterly data for the period 2016 Q1–2020 Q3. Data were obtained from the International Energy Agency (IEA), Federal Reserve Economic Data (FRED), and the OECD official website. According to the results obtained based on panels, there is one-way causality from economic growth to geothermal energy and one-way causality from geothermal energy consumption to foreign direct investments. The results obtained based on individual countries indicate that one-way causality from foreign direct investment to geothermal energy consumption was found for Mexico and Portugal, and one-way causality from geothermal energy consumption to economic growth was found for Italy and Mexico. On the other hand, causality from economic growth to geothermal energy consumption was observed for Germany, Japan, and USA. No significant results were found for Turkey and New Zealand, and it is understood that the macroeconomic structures of these countries are not affected by geothermal energy. The difference in the results reveals that the application recommendations on this subject should also be different.

Suggested Citation

  • Feyyaz Zeren & Nazlıgül Gülcan & Samet Gürsoy & İbrahim Halil Ekşi & Mosab I. Tabash & Magdalena Radulescu, 2023. "The Relationship between Geothermal Energy Consumption, Foreign Direct Investment, and Economic Growth in Geothermal Consumer Countries: Evidence from Panel Fourier Causality Test," Energies, MDPI, vol. 16(3), pages 1-15, January.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:3:p:1258-:d:1045794
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