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

AbstractIt 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

Investigating the nexus between GDP, oil prices, FDI, and tourism for emerging economy: empirical evidence from the novel fourier ARDL and hidden cointegration

This study is conducted to investigate the nexus between GDP, FDI, oil prices, and tourism using yearly data from 1995 to 2017. The integration order is investigated by applying the ADF, PP and Zivot and Andrews unit root tests that identify the integration order in the presence of one endogenous break. After identifying the unique order of integration, this study applies the Fourier autoregressive distributed lag model (FADL) to investigate the evidence of a long-run relationship. Moreover, the Maki (2012) test confirms the results of FADL in the presence of multiple breaks. This study also confirms the hidden cointegration among the negative components of the variables using the FADL test. Moreover, oil prices and tourist arrivals have a negative and positive effect on GDP under the symmetric framework. However, the effect of FDI is insignificant. Furthermore, the negative component of oil prices have a negative and significant effect, while negative components of FDI and tourist arrivals have positive and significant effect on GDP under the asymmetric framework. The results of the symmetric and asymmetric causality suggest the existence of a causal relationship from FDI to GDP and tourism. This highlights the importance of FDI that affects GDP and tourism. The findings suggest that more inward movement of FDI promotes tourism using the channel of oil prices and GDP. This study also validates the FDI-led growth hypothesis for Turkey in both symmetric and asymmetric (positive components). This highlights that the Turkish government must promote tourism to attract more FDI by ensuring sustainable development