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The Electricity Consumption, Real Income, Trade Openness and Foreign Direct Investment: The Empirical Evidence from Turkey

Author

Listed:
  • Ali Acaravci

    (Faculty of Economics and Administrative Sciences, Mustafa Kemal University, Hatay, Turkey)

  • Sinan Erdogan

    (Faculty of Economics and Administrative Sciences, Mustafa Kemal University, Hatay, Turkey,)

  • Guray Akalin

    (Faculty of Economics and Administrative Sciences, Dumlup nar University, Kutahya, Turkey.)

Abstract

This study aims to explore both the long-run and causal relationships between electricity consumption per capita, real gross domestic product (GDP) per capita, trade openness and foreign direct investment inflows per capita in Turkey during the time period 1974-2013. The study employs the autoregressive distributed lag model and the augmented Granger causality model. The bounds F-test for cointegration test yields evidence of a longrun relationship between variables. The overall results from the three error-correction based Granger causality models show that there is an evidence of unidirectional short-run, long-run and strong causalities running from the electricity consumption per capita to real GDP per capita. But, there is no causal evidence from the real GDP per capita to electricity consumption per capita. This result also support that, growth hypothesis is confirmed in Turkey. As a policy implication, the energy growth policies regarding electricity consumption should be adopted in such a way that the development of this sector stimulates economic growth.

Suggested Citation

  • Ali Acaravci & Sinan Erdogan & Guray Akalin, 2015. "The Electricity Consumption, Real Income, Trade Openness and Foreign Direct Investment: The Empirical Evidence from Turkey," International Journal of Energy Economics and Policy, International Journal of Energy Economics and Policy, vol. 5(4), pages 1050-1057.
    • Handle: RePEc:eco:journ2:2015-04-17
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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