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The Causality Link Between Electricity Consumption and Economic Growth in Turkey: Evidence from ARDL Bounds Testing Procedure

Author

Listed:
  • Pata, Uğur Korkut

    (Karadeniz Technical University)

  • Terzi, Harun

    (Karadeniz Technical University)

Abstract

Electricity consumption is regarded as an indicator of welfare in both developing and developed countries. In this study, the causality link between net electricity consumption and economic growth in the Turkish economy is investigated by the 55 annual observations covering the period from 1960 to 2014. According to the results of UVAR and ARDL analysis resolved with both AIC and SIC information criteria, there is a positive unidirectional and statistically significant causality moving from net electricity consumption to economic growth in the short/long run. The empirical results indicate that the energy led-growth hypothesis is valid for Turkey, that is growing net electricity consumption positively stimulates the economic growth in the short/long run.

Suggested Citation

  • Pata, Uğur Korkut & Terzi, Harun, 2017. "The Causality Link Between Electricity Consumption and Economic Growth in Turkey: Evidence from ARDL Bounds Testing Procedure," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 8(1), pages 19-33, January.
    • Handle: RePEc:ris:buecrj:0256
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    Citations

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    Cited by:

    1. Ugur Korkut Pata & Suleyman Yurtkuran, 2017. "The Relationship between Electricity Consumption and Economic Growth in the Selected Member Countries of the International Energy Agency (IEA): An ARDL Bounds Test Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(2), pages 341-364, Spring.
    2. Shengnan Xing & Jindian Lu & Chengmei Zhang & Shuang Sun, 2019. "Does line loss broaden the deviation between the added value of industry and the industrial electricity consumption in China?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(4), pages 1635-1648, August.

    More about this item

    Keywords

    Electricity Consumption; Economic Growth; ARDL; Bounds Test;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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