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

Feyyaz Zeren, Nazlıgül Gülcan, Samet Gürsoy, İbrahim Halil Ekşi, Mosab I. Tabash () and Magdalena Radulescu ()
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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

Energies, 2023, vol. 16, issue 3, 1-15

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.

Keywords: geothermal energy consumption; foreign direct investment; economic growth; geothermal consumer countries; panel Fourier causality (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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