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

Abdullah Göv; Veli Yılancı

Article Details

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

Authors:

Abdullah Göv | Veli Yılancı

Publisher:

Istanbul University

Main Topics:

İşletme

Journal:

İstanbul İktisat Dergisi Vol.73 Issue 1, pp.203-230

Document Type:

Article

Publication Date:

6/2023

Document Language:

Turkish

Document ID (Org No.):

2001296169

pISSN:

2602-4152

Keywords:

Abstract:

 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.

 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.

 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.

 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 LASSOKLASSO Grafiksel Granger NedensellikGGN 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.

Article Details

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

Authors:

Abdullah Göv | Veli Yılancı

Publisher:

Istanbul University

Main Topics:

İşletme

Journal:

İstanbul İktisat Dergisi Vol.73 Issue 1, pp.203-230

Document Type:

Article

Publication Date:

6/2023

Document Language:

Turkish

Document ID (Org No.):

2001296169

pISSN:

2602-4152

Finance

Trade

Truncating LASSOFinans

Ticaret

Kesik LASSO

Issues

Article Details

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

Authors: Abdullah Göv | Veli Yılancı

Publisher: Istanbul University

Main Topics: İşletme

Journal: İstanbul İktisat Dergisi Vol.73 Issue 1, pp.203-230

Document Type: Article

Publication Date: 6/2023

Document Language: Turkish

Document ID (Org No.): 2001296169

pISSN: 2602-4152

Finance

Trade

Truncating LASSOFinans

Ticaret

Kesik LASSO

Issues

Authors:

Abdullah Göv | Veli Yılancı

Publisher:

Istanbul University

Main Topics:

İşletme

Journal:

İstanbul İktisat Dergisi Vol.73 Issue 1, pp.203-230

Document Type:

Article

Publication Date:

6/2023

Document Language:

Turkish

Document ID (Org No.):

2001296169

pISSN:

2602-4152