Linear and non-linear impact of Internet usage and financial deepening on electricity consumption for Turkey: empirical evidence from asymmetric causality

Abstract

This study investigates the relationship between Internet usage, financial development, economic growth, capital and electricity consumption using quarterly data from 1993Q1 to 2014Q4. The integration order of the series is analysed using the structural break unit root test. The ARDL bounds test for cointegration in addition to the Bayer-Hanck (2013) combined cointegration test is applied to analyse the existence of cointegration among the variables. The study found strong evidence of a long-run relationship between the variables. The long-run results under the ARDL framework confirm the existence of an inverted U-shaped relationship between financial development and electricity consumption, not only in the long-run, but also in the short-run. The study also confirms the existence of a U-shaped relationship between Internet usage and electricity consumption; however, the effect is insignificant. Additionally, the influence of trade, capital and economic growth is examined in both the long run and short run (ARDL-ECM). Finally, the results of asymmetric causality suggest a positive shock in electricity consumption that has a positive causal impact on Internet usage. The authors recommend that the Turkish Government should direct financial institutions to moderate the investment in the ICT sector by advancing credits at lower cost for purchasing energy-efficient technologies. In doing so, the Turkish Government can increase productivity in order to achieve sustainable growth, while simultaneously reducing emissions to improve environmental quality.

Application of Bootstrap Simulation and Asymmetric Causal Approach to Fiscal Deficit-Inflation Nexus

“…In an attempt to increase the sample size and the accuracy of the empirical results in the asymmetric causality testing, this study follows the works of Faisal et al (2018), Shahbaz et al (2017), and Sbia et al (2014) by adopting quarterly frequency data from 1981Q1 to 2016Q4. Quadratic match-sum approach is employed to transform annual frequency data to quarterly frequency data.…”

Does financial depth impact economic growth in North Cyprus?

“…In this connection, Faisal, Tursoy, and Berk (2018a) conducted a study to analyse the linear and non-linear relationship between financial development and Internet usage for Turkey. The study utilised the ARDL bounds testing approach to identify the evidence of cointegration.…”

Direct Effect and Spillover Effect of ICT on Electricity Consumption in China: Evidence from a Spatial Panel Analysis

“…eir results showed that improving energy efficiency equipment and mobile communication equipment for Internet Protocol (IP) communications were the most effective measures to reduce electricity demand. With quarterly data from 1993q1 to 2014q4, Faisal et al [15] used the ARDL approach to confirm that there was a U-shaped relationship between Internet use and EC.…”

“…At present, some achievements have confirmed the demand growth effect of ITC on EC [10][11][12][13][14][15][16]. Unfortunately, the existing empirical literature on the relationship between ICT and EC does not consider the spatial dependence of EC.…”

“…Unfortunately, the existing empirical literature on the relationship between ICT and EC does not consider the spatial dependence of EC. Because these methods being used in existing studies assume that the cross-section elements are independent [14][15][16], the existing studies only consider the direct impact of ICT on EC in decision-making units, but neglect the indirect effect of EC caused by the spillover of ICT in spatial neighboring units, which may underestimate or overestimate the comprehensive impact of ICT on EC. In addition, the existing studies, such as Shahbaz et al [12], Saidi et al [14], and Afzal et al [16], regarded ICT and economic growth as independent variables affecting EC and did not reveal the mediation role of economic growth in the process of ICT promoting EC.…”