How Does Financial Development Affect Carbon Dioxide Emissions in Türkiye? An Econometric Approach

Seyit Ordu and Demet Yaman

Fiscaoeconomia, 2026, issue 2

Abstract: The interaction between financial development and environmental sustainability has become an increasingly important research area, especially in emerging market economies. In this context, the main objective of this study is to contribute to sustainable development policies by analyzing the relationship between financial development and carbon dioxide emissions in Türkiye, which has a dynamic economic structure, with annual data for the period 1988-2023. In the empirical analysis, the ARDL bounds test developed by Pesaran et al. (2001) is used. The results of the analysis reveal the existence of a long-run cointegration relationship between financial development and carbon dioxide emissions. Moreover, the long-run coefficients obtained in the analysis indicate that financial development can be a strategic tool for Türkiye to achieve its sustainable development goals.

Keywords: Financial Development; ARDL Bounds Test; Carbon Dioxide Emissions; Türkiye (search for similar items in EconPapers)
JEL-codes: G20 O16 O44 Q56 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:fis:journl:260224

DOI: 10.25295/fsecon.1826980

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