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

Ali Acaravcı (), Sinan Erdogan and Guray Akalin
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Sinan Erdogan: Faculty of Economics and Administrative Sciences, Mustafa Kemal University, Hatay, Turkey,
Guray Akalin: Faculty of Economics and Administrative Sciences, Dumlupýnar University, Kutahya, Turkey.

International Journal of Energy Economics and Policy, 2015, vol. 5, issue 4, 1050-1057

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.

Keywords: Electricity Consumption; Economic Growth; Causality (search for similar items in EconPapers)
JEL-codes: C32 C52 Q43 (search for similar items in EconPapers)
Date: 2015
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