Skip to main content

Advertisement

Springer Nature Link
Log in

A multivariate causality analysis between electricity consumption and economic growth in Turkey

  • Published:
Environment, Development and Sustainability Aims and scope Submit manuscript

Abstract

Energy is among the essential factors for economic development in every field. Nowadays, in addition to increasing energy consumption for countries, the use of flexible energy sources is important for sustainable growth and development. Electricity is a flexible and important energy source that does not directly pollute the air for sustainable growth. The purpose of this study is to analyze the dynamic causality relationship between electricity consumption and growth in Turkey from 1978 to 2013 with a multivariable autoregressive distributed lag (ARDL) and an error correction model (ECM). According to the results of this study, there is a positive unidirectional and statistically significant causality moving from capital, employment, and electricity consumption to short- and long-term economic growth. Electricity plays a role in production as a complementary factor to capital and employment. Reducing electricity consumption affects economic growth negatively. Therefore, Turkey needs to increase electricity consumption, employment, and capital for sustainable development and growth.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+
from $39.99 /Month
  • Starting from 10 chapters or articles per month
  • Access and download chapters and articles from more than 300k books and 2,500 journals
  • Cancel anytime
View plans

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Explore related subjects

Discover the latest articles, books and news in related subjects, suggested using machine learning.

References

  • Acaravci, A., & Ozturk, I. (2012). Electricity consumption and economic growth nexus: A multivariate analysis for Turkey. Amfiteatru Economic, 14(31), 246–257.

    Google Scholar 

  • Aslan, A. (2013). Electricity consumption, labor force and GDP in Turkey: evidence from multivariate Granger causality. Energy Sources, Part B: Economics, Planning and Policy, 9(2), 174–182.

    Article  Google Scholar 

  • Ayres, R. U., Van den Bergh, J. C., Lindenberger, D., & Warr, B. (2013). The underestimated contribution of energy to economic growth. Structural Change and Economic Dynamics, 27, 79–88.

    Article  Google Scholar 

  • Brown, R. L., Durbin, J., & Evans, J. M. (1975). Techniques for testing the constancy of regression relationships over time. Journal of the Royal Statistical Society, 37(2), 149–192.

    Google Scholar 

  • Cobb, C. W., & Douglas, P. H. (1928). A theory of production. The American Economic Review, 18(1), 139–165.

    Google Scholar 

  • Dickey, D. A., & Fuller, W. A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: Journal of the Econometric Society, 49(4), 1057–1072.

    Article  Google Scholar 

  • Elliott, G., Rothenberg, T. J., & Stock, J. H. (1996). Efficient tests for an autoregressive unit root. Econometrica, 64(4), 813–836.

    Article  Google Scholar 

  • Enders, W. (2015). Applied econometric time series (4th ed.). New Jersey: Wiley.

    Google Scholar 

  • Engle, R. F., & Granger, C. W. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica: journal of the Econometric Society, 55(2), 251–276.

    Article  Google Scholar 

  • Georgescu-Roegen, N. (1979). Comments on the papers by Daly and Stiglitz. In V. K. Smith (Ed.), Scarcity and growth reconsidered. Baltimore: John Hopkins University Press.

    Google Scholar 

  • Ghali, K. H., & El-Sakka, M. I. (2004). Energy use and output growth in Canada: A multivariate cointegration analysis. Energy Economics, 26(2), 225–238.

    Article  Google Scholar 

  • Hamdi, H., Sbia, R., & Shahbaz, M. (2014). The nexus between electricity consumption and economic growth in Bahrain. Economic Modelling, 38, 227–237.

    Article  Google Scholar 

  • Harris, J. M. (2000). Basic principles of sustainable development. Global Development and Environment Institute Working Paper, 00–04.

  • IEA. (2016). Energy policies of IEA countries Turkey 2016 review. France: IEA Publications.

    Google Scholar 

  • International Energy Outlook. (2016). U.S. Energy Information Administration, U.S. Department of Energy. Washington, DC.

  • Kraft, J., & Kraft, A. (1978). Relationship between energy and GNP. The Journal of Energy and Development, 3(2), 401–403.

    Google Scholar 

  • Lean, H. H., & Smyth, R. (2010). On the dynamics of aggregate output, electricity consumption and exports in Malaysia: Evidence from multivariate Granger causality tests. Applied Energy, 87(6), 1963–1971.

    Article  Google Scholar 

  • Lorde, T., Waithe, K., & Francis, B. (2010). The importance of electrical energy for economic growth in Barbados. Energy Economics, 32(6), 1411–1420.

    Article  Google Scholar 

  • Lumsdaine, R. L., & Papell, D. H. (1997). Multiple trend breaks and the unit-root hypothesis. Review of Economics and Statistics, 79(2), 212–218.

    Article  Google Scholar 

  • Narayan, P. K. (2005). The saving and investment nexus for China: Evidence from cointegration tests. Applied Economics, 37(17), 1979–1990.

    Article  Google Scholar 

  • Narayan, P. K., & Singh, B. (2007). The electricity consumption and GDP nexus for the Fiji Islands. Energy Economics, 29(6), 1141–1150.

    Article  Google Scholar 

  • Narayan, P. K., & Smyth, R. (2005). Electricity consumption, employment and real income in Australia evidence from multivariate Granger causality tests. Energy Policy, 33(9), 1109–1116.

    Article  Google Scholar 

  • Narayan, P. K., & Smyth, R. (2006). Higher education, real income and real investment in China: Evidence from Granger causality tests. Education Economics, 14(1), 107–125.

    Article  Google Scholar 

  • Odhiambo, N. M. (2009). Electricity consumption and economic growth in South Africa: A trivariate causality test. Energy Economics, 31(5), 635–640.

    Article  Google Scholar 

  • Ouédraogo, I. M. (2010). Electricity consumption and economic growth in Burkina Faso: A cointegration analysis. Energy Economics, 32(3), 524–531.

    Article  Google Scholar 

  • Ozturk, I. (2010). A literature survey on energy—growth nexus. Energy Policy, 38(1), 340–349.

    Article  Google Scholar 

  • Pesaran, M. H., & Shin, Y. (1999). An autoregressive distributed-lag modelling approach to cointegration analysis. In S. Strøm (Ed.), Econometrics and economic theory in the twentieth century (Chap. 11, pp. 371–413). Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.

    Article  Google Scholar 

  • Phillips, P. C., & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75(2), 335–346.

    Article  Google Scholar 

  • Repuplic of Turkey Ministry of Development. (2015). Economic and social indicators. Available at: http://www.mod.gov.tr/Lists/RecentPublications/Attachments/84/Economic%20and%20Social%20Indicators%20(1950-2014).pdf.

  • Rosenberg, N. (1998). The role of electricity in industrial development. The Energy Journal, 19(2), 7–24.

    Article  Google Scholar 

  • Sabanci University. (2013). Available at: http://ref.sabanciuniv.edu/sites/ref.sabanciuniv.edu/files/data_tfp_tur_en.xlsx.

  • Saidi, K., & Mbarek, M. B. (2016). Nuclear energy, renewable energy, CO2 emissions, and economic growth for nine developed countries: Evidence from panel Granger causality tests. Progress in Nuclear Energy, 88, 364–374.

    Article  CAS  Google Scholar 

  • Sargan, J. D. (1964). Wages and prices in the United Kingdom: A study in econometric methodology. In P. E. Hart, G. Mills, & J. K. Whitaker (Eds.), Econometric analysis for national economic planning. London: Butterworths.

    Google Scholar 

  • Schwert, G. W. (1989). Tests for unit roots: A Monte Carlo investigation. Journal of Business & Economic Statistics, 7(2), 147–159.

    Google Scholar 

  • Shahbaz, M., & Lean, H. H. (2012). The dynamics of electricity consumption and economic growth: A revisit study of their causality in Pakistan. Energy, 39(1), 146–153.

    Article  Google Scholar 

  • Shahbaz, M., Mutascu, M., & Tiwari, A. K. (2012). Revisiting the relationship between electricity consumption, capital and economic growth: Cointegration and causality analysis in Romania. Romanian Journal of Economic Forecasting, 3, 97–120.

    Google Scholar 

  • Smulders, S., & De Nooij, M. (2003). The impact of energy conservation on technology and economic growth. Resource and Energy Economics, 25(1), 59–79.

    Article  Google Scholar 

  • Soytas, U., & Sari, R. (2007). The relationship between energy and production: Evidence from Turkish manufacturing industry. Energy Economics, 29(6), 1151–1165.

    Article  Google Scholar 

  • Stern, D. I. (1993). Energy and economic growth in the USA: A multivariate approach. Energy Economics, 15(2), 137–150.

    Article  Google Scholar 

  • Stern, D. I. (1997). Limits to substitution and irreversibility in production and consumption: A neoclassical interpretation of ecological economics. Ecological Economics, 21(3), 197–215.

    Article  Google Scholar 

  • Stern, D. I. (2004). Economic growth and energy. Encyclopedia of Energy, 2(00147), 35–51.

    Article  Google Scholar 

  • Stern, D. I. (2011). The role of energy in economic growth. Annals of the New York Academy of Sciences, 1219(1), 26–51.

    Article  Google Scholar 

  • TETAS. (2013). 2012 yılı sektör raporu, Ankara, May 2013.

  • TETAS. (2016). 2015 yılı sektör raporu, Ankara, May 2016.

  • TUIK. (2014). İstatistik göstergeler 1923–2013, Ankara, 2014.

  • World Bank. (2016). World Development Indicators. Available at: http://data.worldbank.org/data-catalog/world-development-indicators.

  • Zivot, E., & Andrews, D. W. K. (1992). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 10(3), 251–270.

    Google Scholar 

Download references

Acknowledgements

The authors are grateful for the valuable contributions and constructive comments by anonymous referees. We also thank the Editor-in-Chief: Luc Hens for his assistance. Remaining errors are us.

Author information

Authors and Affiliations

  1. Department of Economics, Faculty of Economics and Administrative Sciences, Karadeniz Technical University, 61080, Trabzon, Turkey

    Ugur Korkut Pata

  2. Department of Economics, Faculty of Economics and Administrative Sciences, Avrasya University, 61080, Trabzon, Turkey

    Sukran Kahveci

Authors
  1. Ugur Korkut Pata
    View author publications

    Search author on:PubMed Google Scholar

  2. Sukran Kahveci
    View author publications

    Search author on:PubMed Google Scholar

Corresponding author

Correspondence to Ugur Korkut Pata.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Pata, U.K., Kahveci, S. A multivariate causality analysis between electricity consumption and economic growth in Turkey. Environ Dev Sustain 20, 2857–2870 (2018). https://doi.org/10.1007/s10668-017-0020-z

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10668-017-0020-z

Keywords