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Several empirical studies have explored the influence of financial development on energy consumption; however, the impact of financial development, economic growth, and FDI on renewable energy consumption (REC) has not been studied in the case of the UAE. For this purpose, the long and short-run interactions among economic growth, FDI, financial development, and renewable energy consumption are explored by applying the new technique of bootstrap autoregressive distributed lag, along with Granger causality analysis, in the context of the UAE for the period from 1989–2019. Using estimation techniques, the study reveals the main findings and implications for policymakers in the UAE. The present research provides significant empirical evidence that financial development, FDI, and economic growth can significantly increase renewable energy consumption in the UAE. Therefore, it is essential to promote financial development in the UAE in order to avert the financial risks that undermine the stability of the financial markets and that negatively affect the REC. Furthermore, policymakers in the UAE should promote the concept of green finance and should provide more funds for investments in green energy for sustainable energy development in the UAE.

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PurposeThe purpose of this paper is to investigate the performance of the arbitrage pricing theory (APT) in the Istanbul Stock Exchange (ISE) on a monthly basis, for the period January 2001 to September 2005.Design/methodology/approachThis study examines six pre‐specified macroeconomic variables which are: the term structure of interest rate, unanticipated inflation, risk premium, exchange rate and money supply. All these are the same as those used by Chen, Roll and Roll for the US market. In this study, the authors develop one more variable namely unemployment rate, which has a relation with the stock return.FindingsUsing the OLS technique, the authors observed that there are some differences among the market portfolios. Before starting to comment on the result of OLS, the serial correlation problem was discussed by using Durbin‐Watson statistics. In this study, the critical values were ranged from between 1.33 and 1.81 (T=57, K=6). Our test results confirmed that in ten out of the 13 there were no serial correlations. Our results show that there are big differences among market portfolios against macroeconomic variables through the variation of R2. In the remaining portfolios; there was no evidence to suggest.Research limitations/implicationsIn this paper, the authors face a problem that was no corporate bond in Turkey's market.Originality/valueThis analysis appears to be the first empirical test of APT using the CAPM formula for finding the risk premium point for ISE.

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This paper investigates the interaction between stock prices and real exchange rates by applying monthly data from Turkey for the period between January 2001 and September 2016. This study uses the autoregressive distributed lag (ARDL) model and the Error Correction Model (ECM) in order to investigate the existence of a long-run equilibrium relationship between the variables. The evidence reveals that there is a strong long-run cointegration. The robustness of the ARDL bounds test cointegration was confirmed using the newly-developed combined cointegration, which also provided the same evidence for a strong long-run relationship. The Granger causality test results indicate a long-run bidirectional causality between stock prices and real exchange rates, and also a unidirectional causality from the real exchange rates to the stock prices in the short-run. In order to analyze the validity and reliability of the test results, diagnostic tests were applied in both the short-run and long-run models.

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