Graphical Causality Test Approach to the Relationship Between Economic Growth, Energy Consumption, Foreign Trade Balance and Financial Development

Yıl 2023, Cilt: 73 Sayı: 1, 203 - 230, 26.06.2023

Abdullah Göv , Veli Yılancı

https://doi.org/10.26650/ISTJECON2022-1164588

Öz

The aim of this study is to examine the relationships among economic growth, energy consumption, financial development, and foreign trade for 30 developing countries by employing the least absolute shrinkage and selection operator (LASSO) and truncating LASSO (KLASSO) graphical Granger causality (GGN) approaches. The results of the KLASSO GGN test show a unidirectional causality relationship to exist from economic growth to the trade balance, while the findings of the LASSO GGN test indicate a bidirectional causality to exist between these two series. The study has also determined a unidirectional causality to exist from financial development and energy consumption to economic growth. Overall, the empirical findings support the growth hypothesis and the demand-following hypothesis. Evidence has also been obtained showing economic growth to be an important factor affecting the change in the foreign trade balance among the examined country group and period (1990-2019).

Anahtar Kelimeler

Finance, Trade, Truncating LASSO

Ekonomik Büyüme, Enerji Tüketimi, Dış Ticaret Dengesi ve Finansal Gelişme İlişkisine Grafiksel Nedensellik Testi Yaklaşımı

Öz

Bu çalışmanın amacı, gelişmekte olan 30 ülke özelinde ekonomik büyüme ile enerji tüketimi, finansal gelişme ve dış ticareti dengesi arasındaki ilişkiyi incelemektir. Analizde LASSO ile Kesik LASSO(KLASSO) Grafiksel Granger Nedensellik(GGN) yaklaşımlarından yararlanılmıştır. Elde edilen sonuçlarda, KLASSO GGN testi ekonomik büyümeden dış ticaret dengesine doğru tek yönlü, LASSO GGN testi ise bu iki değişken arasında çift yönlü bir nedensellik ilişkisinin olduğu sonucunu vermiştir. Bununla birlikte iki testin bulgularında, nedensellik ilişkisinin finansal gelişme ile enerji tüketiminden ekonomik büyümeye doğru tek yönlü olduğu tespit edilmiştir. Ampirik bulgular enerji tüketimi-ekonomik büyüme ilişkisinde büyüme hipotezini, finansal gelişme-ekonomik büyüme ilişkisinde ise talep takipli hipotezi desteklemektedir. Buna ilaveten incelenen ülke grubu ve dönemde (1990-2019) ekonomik büyümenin dış ticaret dengesinin değişimi üzerinde etkisi olan önemli bir faktör olduğuna dair kanıtlar elde edilmiştir.

Anahtar Kelimeler

Finans, Ticaret, Kesik LASSO

Kaynakça

• Al-mulali, U., Fereidoun, H.G. Lee, J.Y. & Sab, C.H.B.C. (2013). Examining The Bi-Directional Long Run Relationship Between Renewable Energy Consumption and GDP Growth. Renewable and Sustainable Energy Reviews, 22, 209-222. google scholar
• Apergis, N., Payne, J.E, Menyah, K. & Wolde-Rufae, Y. (2010). On The Causal Dynamics Between Emissions, Nuclear Energy, Renewable Energy, and Economic Growth. Ecological Economics, 69, 2255-2260. google scholar
• Apergis, N. & Payne, J.E. (2011). The Renewable Energy Consumption-Growth Nexus in Central America. Applied Energy, 88(1), 343-347. google scholar
• Arnold, A., Liu, Y. & Abe, N. (2007). Temporal Causal Modeling with Graphical Granger Methods. In Proceedings of the Thirteenth ACM SIGKDD International Conference on Knowledge Discovery and Data Mining, 66-75, San Jose, California, USA. google scholar
• Asghar, N. & Hussain, Z. (2014). Financial Development, Trade, Openness and Economic Growth in Developing Countries Recent Evidence from Panel Data. Pakistan Economic and Social Review, 52(2), 99-126. google scholar
• Atindehou, R., Gueyie, J.P. & Amenounve, E.K. (2005). Financial Intermediation and Economic Growth: Evidence from Western Africa. Applied Financial Economics, 15(11), 777-790. google scholar
• Aydın, F.F. (2010). Enerji Tüketimi ve Ekonomik Büyüme. Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 35, 317-340. google scholar
• Bahadori, M. T., & Liu, Y. (2013, May). An examination of practical granger causality inference. In Proceedings of the 2013 SIAM International Conference on data Mining (pp. 467-475). Society for Industrial and Applied Mathematics. google scholar
• Bajwa, S. & Siddiqi, M.W. (2011). Trade Openness and its Effects on Economic Growth in Selected South Asian Countries: A Panel Data Study. World Academy of Science, Engineering and Technology, 5(2), 212-217. google scholar
• Belke, A., Dobnik, F. & Dreger, C. (2011). Energy Consumption and Economic Growth: New Insights into The Cointegration Relationship. Energy Economics, 33(5), 782-789. google scholar
• Bojanic, A.N. (2012). The Impact of Financial Development and Trade on The Economic Growth of Bolivia. Journal of Applied Economics, 15(1), 51-70. google scholar
• Boutabba, M.A. (2014). The Impact of Financial Development, Income, Energy and Trade on Carbon Emissions: Evidence from The Indian Economy. Economic Modelling, 40, 33-41. google scholar
• Calderon, C. & Liu, L. (2003). The Direction of Causality Between Financial Development and Economic Growth. Journal of Development Economics, 72(1), 321-334. google scholar
• Chang, T., Chu, H.P. & Chen, W.Y. (2013). Energy Consumption and Economic Growth in 12 Asian Countries: Panel Data Analysis. Applied Economics Letters, 20(3), 282-287. google scholar
• De Leeuw, J. (1994). Block-Relaxation Algorithms in Statistics. In Information System and Data Analysis, 308-325, Springer, Berlin, Heidelberg. google scholar
• Dinçer, G. (2014). Dış Ticaret Kuramında Çekim Modeli. Ekonomik Yaklaşım, 24(88), 1-34. google scholar
• Eichler, M. (2005). A Graphical Approach for Evaluating Effective Connectivity in Neural Systems. Phil. Trans. R. Soc. B, 360(1457), 953-967. google scholar
• Eroğlu, İ., & Yeter, F. (2021). Finansal Gelişme ve Ekonomik Büyüme İlişkisi: Türkiye İçin Nedensellik Analizi. JOEEP:Journal of Emerging Economies and Policy, 6(2), 272-286. google scholar
• Eser, Y.L. ve Genç, M.C. (2010). Kamu Büyüklüğü ve Kişi Başına Gelir Arasındaki Nedensellik İlişkisi: Türkiye Örneği (1968- 2005). Finans Politik ve Ekonomik Yorumlar, 47(541), 61-70. google scholar
• Esseghir A. & Khouni, L.H. (2014). Economic Growth, Energy Consumption and Sustainable Development: The Case of The Union for The Mediterranean Countries. Energy, (71), 218-225. google scholar
• Fatai, K, Oxley, L. & Scrimgeour, F. (2002). Energy Consumption and Employment in New Zealand: Searching for Causality. In Proceedings of the paper presented at NZAE conference, 26-28, Wellington. google scholar
• Fatai, K., Oxley, L. & Scrimgeour, F.G. (2004). Modelling the causal relationship between energy consumption and GDP in New Zealand, Australia, India, Indonesia, The Philippines and Thailand. Mathematics and Computers in Simulation, 64(3-4), 431-445. google scholar
• Fowowe, B. (2012). Energy Consumption and Real GDP: Panel Co-Integration and Causality Tests for Sub-Saharan African Countries. Journal of Energy in Southern Africa, 23(1), 8-14. google scholar
• Francis, B.M., Moseley, L. & Iyare S.O. (2007). Energy Consumption and Projected Growth in Selected Caribbean Countries. Energy Economics, 29(6), 1224-1232. google scholar
• Fuinhas, J.A. & Marques, A.C. (2012). Energy Consumption and Economic Growth Nexus in Portugal, Italy, Greece, Spain and Turkey: An ARDL Bounds Test Approach (1965-2009). Energy Econmics, 34(2), 511-517. google scholar
• Granger, C.W.J. (1969). Investigating Causal Relations by Econometric Models and Cross-Spectral Methods. Econometrica, 37(3), 424-438. google scholar
• Gregory, A. W., & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of econometrics, 70(1), 99-126. google scholar
• Güzel, İ., & Oluç, İ. (2021). Ekonomik Büyüme-Finansal Gelişme İlişkisinin Ek Değişkenlerle Analizi: Türkiye Örneği. Akademik Yaklaşımlar Dergisi, 12(1), 57-73. google scholar
• Halicioglu F. (2009). An Econometric Study of CO2 Emissions, Energy Consumption, Income and Foreign Trade in Turkey. Energy Policy, 37, 1156-64. google scholar
• Hossain, M. S. (2011). Panel Estimation for CO2 Emissions, Energy Consumption, Economic Growth, Trade Openness and Urbanization of Newly Industrialized Countries. Energy Policy, 39(11), 6991-6999. google scholar
• Im, K.S., Pesaran, M.H. & Shin, Y. (2003). Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 115(1), 53-74. google scholar
• Intisar, R. A., Yaseen, M. R., Kousar, R., Usman, M. & Makhdum, M. S.A. (2020). Impact of Trade Openness and Human Capital on Economic Growth: A Comparative Investigation of Asian Countries. Sustainability, 12(7), 1-19. google scholar
• Kar, M., Nazlıoğlu, Ş. & Ağır, H. (2014). Trade Openness, Financial Development and Economic Growth in Turkey: Linear and Nonlinear Causality Analysis. BDDK Bankacılık ve Finansal Piyasalar Dergisi, 8(1), 63-86. google scholar
• Kaushal, L.A. & Pathak, N. (2015). The Causal Relationship among Economic Growth, Financial Development and Trade Openess in Indian Economy. International Journal of Economic Perspectives, 9(2), 5-22. google scholar
• Khan, M.A. & Qayyum, A. (2007). Dynamic Modelling of Energy and Growth in South Asia. The Pakistan Development Review, 46(4), 481-498. google scholar
• King, R.G. & Levine, R. (1993). Finance, Entrepreneurship and Growth: Theory and Evidence. Journal of Monetary Economics, 32, 513-542. google scholar
• Konya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Economic Modelling, 23(6), 978-992. google scholar
• Köstekçi, A. & Yıldız, F. (2019). Kamu Borç Yönetimi Türkiye ve OECD Ülke Uygulamaları, Ekin Yayınevi, Bursa. google scholar
• Lean, H.H. & Smyth, R. (2010). CO2 Emissions, Electricity Consumption and Output in ASEAN. Applied Energy, 87(6), 1858-1864. google scholar
• Lee, C.C. (2005). Energy Consumption and GDP in Developing Countries: A Cointegrated Panel Analysis. Energy Economics, 27(3), 415-427. google scholar
• Lee C.C. & Lee, J.D. (2010). A Panel Data Analysis of the Demand for Total Energy and Electricity in OECD Countries. The Energy Journal, 31(1), 1-23. google scholar
• Levine, R., Loayza, N. & Beck, T. (2000). Financial Intermediation and Growth: Causality and Causes. Journal of Monetary Economics, 46, 31-77. google scholar
• Levine R. & Zervos, S. (1996). Stock Market Development And Long-Run Growth. World Bank Economic Review, 10(2), 323-339. google scholar
• Levine R. & Zervos, S. (1998). Stock Markets, Banks and Economic Growth. The American Economic Review, 88(3), 537-558. google scholar
• Lozano, A.C., Abe, N., Liu, Y. & Rosset, S. (2009). Grouped Graphical Granger Modeling for Gene Expression Regulatory Networks Discovery. Bioinformatics, 25(12), i110-i118. google scholar
• Lütkepohl, H. (2005). New Introduction to Multiple Time Series Analysis, Springer, Berlin. google scholar
• Maddala, G.S. & Wu, S. (1999) "A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test. Oxford Bulletin of Economics and Statistics, 61, 631-652. google scholar
• Maki, D. (2012). Tests for cointegration allowing for an unknown number of breaks. Economic Modelling, 29(5), 2011-2015. google scholar
• McKinnon, R.I. (1973), Money and Capital in Economic Development, Brookings Institution, Washington, DC. google scholar
• Menegaki, A.N. & Tuğcu, C.T. (2016). The Sensitivity of Growth, Conservation, Feedback & Neutrality Hypotheses to Sustainability Accounting. Energy for Sustainable Development, 34, 77-87. google scholar
• Mercan, M. ve Peker, O. (2013). Finansal Gelişmenin Ekonomik Büyümeye Etkisi: Ekonometrik Bir Analiz. Eskişehir Osmangazi Üniversitesi İİBF Dergisi, 8(1), 93-120. google scholar
• Narayan, P.K. & Smyth, R. (2008). Energy Consumption and Real GDP in G7 Countries: New Evidence from Panel Cointegration with Structural Breaks. Energy Economics, 30(5), 2331-2341. google scholar
• Neusser, K. & Kugler, M. (1998). Manufacturing Growth and Financial Development: Evidence From OECD Countries. Review of Economics and Statistics, 80, 638-646. google scholar
• Oğuz, S. ve Huskic, M. (2019). On The Relationship Between Financial Development and Trade Openness. Siyaset, Ekonomi ve Yönetim Araştırmaları Dergisi, 7(1), 23-32. google scholar
• Omay, T., Hasanov, M. & Uçar, N. (2012). Energy Consumption and Economic Growth: Evidence from Nonlinear Panel Cointegration and Causality Tests. MPRA Paper No:37653. google scholar
• Omri, A. (2014). An International Literature Survey on Energy-Economic Growth Nexus: Evidence from Country-Specific Studies. Renewable and Sustainable Energy Reviews, 38, 951-959. google scholar
• Özcan, B. ve Arı, A. (2011). Finansal Gelişme ve Ekonomik Büyüme Arasındaki İlişkinin Ampirik Bir Anallizi: Türkiye Örneği. Business and Economics Research Journal, 2(1), 121-142. google scholar
• Öztürk, N., Darıcı, H. K. ve Kesikoğlu, F. (2011). Ekonomik Büyüme ve Finansal Gelişme İlişkisi: Gelişmekte Olan Piyasalar İçin Bir Panel Neensellik Analizi. Marmara Üniversitesi İİBF Dergisi, 30(1), 53-69. google scholar
• Ouedraogo, N.S. (2013). Energy Consumption and Economic Growth: Evidence from the Economic Community of West African States (ECOWAS). Energy Economics, 36, 637-647. google scholar
• Patrick, H.T. (1966). Financial Development and Economic Growth in Underdeveloped Countries. Economic Development and Cultural Change, 14(2), 174-189. google scholar
• Payne, J.E. (2010). Survey of The International Evidence on The Causal Relationship Between Energy Consumption and Growth. Journal of Economic Studies, 37(1), 53-95. google scholar
• Pirlogea, C. & Cicea, C. (2012). Econometric Perspective of The Energy Consumption and Economic Growth Relation in European Union. Renewable and Sustainable Energy Reviews, 16(8), 5718-5726. google scholar
• Qi, M., Xu, J., Amuji, N. B., Wang, S., Xu, F. & Zhou, H. (2022). The Nexus among Energy Consumption, Economic Growth and Trade Openness: Evidence from West Africa. Sustainability, 14(6), 1-22. google scholar
• Raza, S.A., Shahbaz, M. & Nguyen, D.K. (2015). Energy Conservation Policies, Growth and Trade Performance: Evidence of Feedback Hypothesis in Pakistan. Energy Policy, 80, 1-10. google scholar
• Shahbaz, M. (2012). Does Trade Openness Affect Long Run Growth? Cointegration, Causality and Forecast Error Variance Decomposition Tests for Pakistan. Economic Modelling, 29(6), 2325-2339. google scholar
• Shahbaz, M., Khan S. & Tahir, M.I. (2013). The Dynamic Links Between Energy Consumption, Economic Growth, Financial Development and Trade in China: Fresh Evidence from Multivariate Framework Analysis. Energy Economics, 40, 8-21. google scholar
• Shahzad, S.J.H., Kumar, R.R., Zakaria, M. & Hurr, M. (2017). Carbon Emission, Energy Consumption, Trade Openness and Financial Development in Pakistan: A Revisit. Renewable and Sustainable Energy Reviews, 70, 185-192. google scholar
• Shojaie, A. & Michailidis, G. (2010a). Discovering Graphical Granger Causality Using The Truncating LASSO Penalty. Bioinformatics, 26(18), i517-i523. google scholar
• Shojaie, A. & Michailidis, G. (2010b). Penalized Likelihood Methods for Estimation of Sparse High Dimensional Directed Acyclic Graphs. Biometrika, 97(3), 519-538. google scholar
• Squalli, J. (2007). Electricity Consumption and Economic Growth: Bounds and Causality Analyses of OPEC Countries. Energy Economics, 29, 1192-205. google scholar
• Stern, D.I. (2000). A Multivariate Cointegration Analysis of The Role of Energy in The US Macroeconomy. Energy Economics, 22, 267-283. google scholar
• The World Bank WDI (2019), https://data.worldbank.org/indicator, (Erişim Tarihi: 25.03.2019). Tibshirani, R. (1996). Regression Shrinkage and Selection via The LASSO. Journel of Royal Statistical Society Series B, 58(1), 267-288. google scholar
• Tinbergen, J. (1962), Shaping the World Economy: Suggestions for an International Economic Policy, New York: Twentieth Century Fund. google scholar
• Tsani, S.Z. (2010). Energy Consumption and Economic Growth: A Causality Analysis for Greece.Energy Policy, 32(3), 582-590. google scholar
• Uslu, H. (2022). Türkiye'de Finansal Gelişme ve Enerji Tüketiminin Ekonomik Büyüme Üzerindeki Etkisi: Yapısal Kırılmalı Bir Analiz. Manas Sosyal Araştırmalar Dergisi, 11(1), 188-217. google scholar
• Xu, Z. (2000). Financial Development, Investment, and Economic Growth. Economic Inquiry, 38(2), 331-344. google scholar
• Yuan, M. & Lin, Y. (2006). Model Selection and Estimation in Regression with Grouped Variables. Journel of Royal Statistical Society B, 68(1), 49-67. google scholar