Korhan K. Gokmenoglu

The relationship between Co 2 emissions, energy consumption, economic growth and FDI: the case of Turkey

ABSTRACT This study investigates the relevance of the environmental Kuznets curve (EKC) hypothesis in Turkey for the period 1974–2010 using carbon dioxide (CO2) emissions, energy consumption, economic growth, and foreign direct investment (FDI) variables. The long-run equilibrium relationship among CO2 emissions, energy consumption, economic growth, and FDI is revealed using the bounds test. The error correction model under autoregressive-distributed lag mechanism suggests that CO2 emissions converge to their long-run equilibrium level by a 49.2% speed of adjustment every year by the contribution of energy consumption, economic growth, and FDI. The Toda–Yamamoto (1995) causality test results imply that carbon emissions and FDI, energy consumption, and CO2 emissions have bidirectional causal relationships. On the other hand, there are unidirectional causal relationships running from economic growth and energy consumption to FDI and from economic growth to energy consumption. Our findings provide evidence of the validity of the pollution haven hypothesis, in addition to the scale effect, and the EKC in the case of Turkey.

Testing the EKC hypothesis by considering trade openness, urbanization, and financial development: the case of Turkey

This study investigates the environmental Kuznets curve (EKC) hypothesis for the case of Turkey from 1960 to 2013 by considering energy consumption, trade, urbanization, and financial development variables. Although previous literature examines various aspects of the EKC hypothesis for the case of Turkey, our model augments the basic model with several covariates to develop a better understanding of the relationship among the variables and to refrain from omitted variable bias. The results of the bounds test and the error correction model under autoregressive distributed lag mechanism suggest long-run relationships among the variables as well as proof of the EKC and the scale effect in Turkey. A conditional Granger causality test reveals that there are causal relationships among the variables. Our findings can have policy implications including the imposition of a “polluter pays” mechanism, such as the implementation of a carbon tax for pollution trading, to raise the urban population’s awareness about the importance of adopting renewable energy and to support clean, environmentally friendly technology.

The Relationship among International Trade, Financial Development and Economic Growth: The Case of Pakistan☆

Abstract This study is conducted to investigate the relationship among international trade, financial development and economic growth in Pakistan. The ADF and PP tests are used to check the order of integration of the variables and Johansen co-integration methodology is employed to investigate the long run relationship among these variables. The direction of causality between variable is tested by Granger causality test. It is found that all of the variables are non-stationary and the analysis confirm for a long run relationship among international trade, financial development and economic growth. The results indicate that international trade and financial development spur economic growth in Pakistan.

Relationship between Industrial Production, Financial Development and Carbon Emissions: The Case of Turkey

Abstract It is widely accepted that industrialization causes air pollution due to increased fossil fuel consumption. On the other hand, recent literature related with the impacts of financial development on air pollution has produced some mixed results. It is argued that not having proper energy policies has become a more severe problem for Turkey as the industrial activities have been accelerated in the country. The present study investigates the long run relationship between industrialization, financial development and carbon emissions by using Granger causality test in Turkey. Findings of the present study reveal a unidirectional relationship from financial development to carbon emissions.

Military Expenditure and Economic Growth: The Case of Turkey

Abstract This study applies Johansen co-integration and Granger causality tests to examine the long-run equilibrium relationship and the causality between military expenditure (ME) and economic growth (GDP) for the case of Turkey which has been a rapidly developing economy for the last decade. Annual data covering 1988-2013 periods is used to conduct empirical investigation. The findings of the study indicate that in the long-run, military spending and economic growth are co-integrated. The results of Granger causality test suggests that there is a uni-directional relationship running from economic growth to military spending, however any causality from military spending to economic growth isn’t observed in the present study.

The Interactions among Gold, Oil, and Stock Market: Evidence from S&P500

Abstract The inter-relationship between financial and commodity markets is one of the most challenging issues for investors. The volatility in one market might affect the price index of the other market. The aim of this paper is to test whether gold price, oil price, gold price volatility (GVZ) and oil price volatility (OVX) have significant effect on stock market price index (GSPC) or not. In order to carry out the task, due to the properties of the data, the ARDL co-integration approach has been used to check the long–run relationship among OVX and GVZ; as proxies of oil and gold market volatility indexes; and S&P500 market price index. Obtained results indicate the presence of long-run equilibrium among the variables under investigation and reveal that S&P500 stock market price index converges to its long-run equilibrium level by 1.2% speed of daily adjustment by contribution of oil and gold market prices and their volatilities.

The Export-Led Growth: A Case Study of Costa Rica

This paper empirically investigates the export-led growth hypothesis for Costa Rica. Johansen co-integration and Granger Causality tests are employed to investigate the long-run relationship and causality between exports and economic growth respectively. The results of Johansen co-integration indicate a long-run equilibrium relationship between exports and economic growth. Granger causality test results show an unidirectional causality from economic growth to export growth of Costa Rica.

The Relationship between Industrial Production, GDP, Inflation and Oil Price: The Case of Turkey

Abstract After the oil shock in 1973, the number of studies on causal relationship between oil price and macroeconomic variables has dramatically increased. This paper investigates the relationship among the oil price, inflation, GDP and industrial production for 1961 to 2012 period in the case of Turkey. Data used in the study was extracted from World Bank Development Indicators and the OPEC. Three different tests, namely unit root, co-integration and causality tests, have been employed to investigate the relationship among the variables. The results of Phillips-Perron (PP) as a unit root test suggests that all the variables under investigation are integrated of order one; I(1). Johansen co-integration results confirm a long-run relationship among these variables and Granger causality test illustrates the unidirectional relationship from oil price to industrial production.

The Determinants of Nonperforming Loans: The Case of Turkey

The aim of this paper is to investigate the macroeconomic and sector-specific factors likely to affect nonperforming loans (NPLs) for the Turkish banking sector. The study covers a quarterly time series span of 2006–2015 and uses the time series econometric methods of the Johansen cointegration test, vector error correction model (VECM), and the Granger causality test. In the analysis, we use the industrial production index (IPI), top 100 companies among the Borsa Istanbul Stock Exchange Index (BIST 100), and exchange rates between the Turkish lira to euro (EUR) and Turkish lira to U.S. dollar (USD) as proxies for the state of the economy and bank-specific factors; return on asset (ROA) and return on equity (ROE) are proxies for the managerial efficiency of banks in determining NPLs. The general findings support the relevance of both micro- and macroeconomic fundamentals significantly affecting Turkish NPLs. In this study we also illustrate the adverse impact of external foreign currency financing on the ability to service debt for Turkish credit market participants. The findings may prove to be helpful when designing macro- and microeconomic policies aimed at mitigating systematic risk.

Testing the agriculture-induced EKC hypothesis: the case of Pakistan

This study investigates the long-run equilibrium relationship among carbon dioxide (CO2) emissions, income growth, energy consumption, and agriculture, thus testing the existence of what we call the agriculture-induced environmental Kuznets’ curve (EKC) hypothesis in the case of Pakistan for the period of 1971–2014. The long-run equilibrium relationship among the variables in the conducted model is confirmed by Maki’s (EM 29(5), 2011–2015, 2012) co-integration test under multiple structural breaks. Toda-Yamamoto’s (JE 66(1):225–250, 1995) causality test results reveal bidirectional causal relationships among gross domestic product (GDP), energy use, agriculture, and CO2 emissions. Fully modified ordinary least squares (FMOLS) results suggest that GDP has elastic positive impacts on CO2 emissions, and energy use and agricultural value added have inelastic positive impacts on CO2 emissions, whereas squared GDP has an inelastic and negative effect on CO2 emissions. This finding confirms the existence of the agriculture-induced EKC hypothesis in Pakistan and can be a guideline for other agrarian developing countries for the creation of effective policies around environmental degradation.