Are the effects of energy security on economic growth symmetric or asymmetric in Turkey? An application of non-linear ARDL

Abstract

This paper is examined whether the relationship between economic growth and energy security risk level is symmetric or asymmetric in the case of Turkey between 1980 and 2018. What makes different of this study from the others few studies that examine the effects of energy security on economic growth by considering the 4A of energy security is that it examines the asymmetric impacts of energy security on economic growth by using the NARDL method. Accordingly, the results of the linear ARDL demonstrate that there is no long-term relationship between energy security risk level and economic growth. On the other hand, the results of the non-linear ARDL indicate that there is an asymmetrical relationship between economic growth and energy security risk level both in the long and short-term. Furthermore, according to the NARDL results, a 1% increase in energy security risk level decreases economic growth by approximately 0.60%, while a 1% decrease in energy security risk level increases economic growth by approximately 1.72%. These results demonstrate that economic growth in Turkey is significantly affected by positive and negative changes in the energy security risk level. Therefore, the results reveal the importance of policies to ensure energy security and allow for important policy implications for policymakers.

Keywords

• Energy Security
• Economic Growth
• Energy Policy
• Turkish Economy
• Non-linear ARDL
• NARDL

References

1. Ahmed, S. Uddin, Ali, A., Kumar, D., Malik, M. Z., & Memon, A. H. (2019). China Pakistan Economic Corridor and Pakistan’s energy security: A meta-analytic review. Energy Policy, 127, 147–154. https://doi.org/10.1016/j.enpol.2018.12.003
2. Alley, I., Asekomeh, A., Mobolaji, H., & Adeniran, Y. A. (2014). Oil Price Shocks and Nigerian Economic Growth. European Scientific Journal, 10(19), 375–391.
3. Azzuni, A., & Breyer, C. (2018). Energy security and energy storage technologies. Energy Procedia, 155, 237–258. https://doi.org/10.1016/j.egypro.2018.11.053
4. Balitskiy, S., Bilan, Y., & Strielkowski, W. (2014). Energy security and economic growth in the European Union. Journal of Security and Sustainability Isues, 4(2), 123–130. https://doi.org/10.9770/jssi.2014.4.2(2)
5. Bambawale, M. J., & Sovacool, B. K. (2011). China’s energy security: The perspective of energy users. Applied Energy, 88(5), 1949–1956. https://doi.org/10.1016/j.apenergy.2010.12.016
6. Bernanke, B. S., Gertler, M., Watson, M., Sims, C. A., & Friedman, B. M. (1997). Systematic Monetary Policy and the Effects of Oil Price Shocks. Brookings Papers on Economic Activity, 1997(1), 91–157.
7. Berument, M. H., Ceylan, N. B., Dogan, N., The, S., & Journal, E. (2016). The Impact of Oil Price Shocks on the Economic Growth of Selected MENA Countries. The Energy Journal, 31(1), 149–176.
8. BP. (2021). Statistical review of world energy. Retrieved July 31, 2021, from https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html

9. Çeli̇kpala, M. (2014). Enerji güvenliği: NATO’nun yeni tehdit algısı. Uluslararası İlişkiler, 10(40), 75–99.
10. Doroodian, K., & Boyd, R. (2003). The linkage between oil price shocks and economic growth with inflation in the presence of technological advances: A CGE model. Energy Policy, 31(10), 989–1006. https://doi.org/10.1016/S0301-4215(02)00141-6
11. Du, L., Yanan, H., & Wei, C. (2010). The relationship between oil price shocks and China’s macro-economy: An empirical analysis. Energy Policy, 38(8), 4142–4151. https://doi.org/10.1016/j.enpol.2010.03.042
12. Elder, J., & Serletis, A. (2010). Oil price uncertainty. Journal of Money, Credit and Banking, 42(6), 1137–1159. https://doi.org/10.1111/j.1538-4616.2010.00323.x
13. Energy Charter Secretariat. (2015). International Energy Security: Common Concept for Energy Producing, Consuming and Transit Countries.
14. Fang, D., Shi, S., & Yu, Q. (2018). Evaluation of sustainable energy security and an empirical analysis of China. Sustainability, 10(5), 1685. https://doi.org/10.3390/su10051685
15. Farzanegan, M. R., & Markwardt, G. (2009). The effects of oil price shocks on the Iranian economy. Energy Economics, 31(1), 134–151. https://doi.org/10.1016/j.eneco.2008.09.003
16. Gasparatos, A., & Gadda, T. (2009). Environmental support, energy security and economic growth in Japan. Energy Policy, 37(10), 4038–4048. https://doi.org/10.1016/j.enpol.2009.05.011
17. Ghalayini, L. (2011). The Interaction between Oil Price and Economic Growth. Middle Eastern Finance and Economics, (13), 127–141.
18. Global Energy Institute. (2018). International Index of Energy Security Risk 2018 Edition. Retrieved January 27, 2019, from https://www.globalenergyinstitute.org/sites/default/files/2019-10/Final2018Index.pdf
19. Global Energy Institute. (2020). International energy security risk index 2020 edition. Retrieved July 16, 2020, from https://www.globalenergyinstitute.org/energy-security-risk-index
20. International Energy Agency. (2020). Energy security. Retrieved August 6, 2020, from https://www.iea.org/topics/energy-security
21. Jiménez-Rodríguez, R., & Sánchez, M. (2005). Oil price shocks and real GDP growth: Empirical evidence for some OECD countries. Applied Economics, 37(2), 201–228. https://doi.org/10.1080/0003684042000281561
22. Kartal, G. (2018). Orta Doğu ülkelerinde politik istikrarsızlık, enerji güvenliği ve ekonomik büyüme ilişkisi. PhD. Thesis, Nevşehir Hacı Bektaş Veli University.
23. Kartal, G. (2020). Politik istikrarsizlik ve enerji güvenliği ekseninde Orta Doğu ekonomileri. İstanbul: Hiperyayın.
24. Kartal, G. (2022a). Enerji güvenliği ve ekonomik büyüme ilişkisi: Türk Dünyası ülke panelinden kanıtlar. Bilig, (101), 163–192. https://doi.org/10.12995/bilig.10107
25. Kartal, G. (2022b). The relationship between energy security and economic growth: A bootstrap panel granger causality analysis. Politická Ekonomie, In Press.
26. Kartal, G., & Öztürk, S. (2020). Politik istikrarsızlık, enerji güvenliği ve ekonomik büyüme ilişkisi: Orta Doğu ülkeleri üzerine ampirik bir inceleme. Anemon Muş Alparslan Üniversitesi Sosyal Bilimler Dergisi, 8(İktisadi ve İdari Bilimler), 65–78. https://doi.org/10.18506/anemon.629534
27. Kilian, L., & Park, C. (2009). The impact of oil price shocks on the US stock market. International Economic Review, 50(4), 1267–1287. https://doi.org/10.1111/j.1468-2354.2009.00568.x
28. Kim, H., Shin, E., & Chung, W. (2011). Energy demand and supply, energy policies, and energy security in the Republic of Korea. Energy Policy, 39(11), 6882–6897. https://doi.org/10.1016/j.enpol.2011.07.056
29. Kruyt, B., van Vuuren, D. P., de Vries, H. J. M., & Groenenberg, H. (2009). Indicators for energy security. Energy Policy, 37(6), 2166–2181. https://doi.org/10.1016/j.enpol.2009.02.006
30. Le, T. H., & Nguyen, C. P. (2019). Is energy security a driver for economic growth? Evidence from a global sample. Energy Policy, 129, 436–451. https://doi.org/10.1016/j.enpol.2019.02.038
31. Li, Y., Shi, X., & Yao, L. (2016). Evaluating energy security of resource-poor economies: A modified principle component analysis approach. Energy Economics, 58, 211–221. https://doi.org/10.1016/j.eneco.2016.07.001
32. Nepal, R., & Paija, N. (2019). Energy security, electricity, population and economic growth: The case of a developing South Asian resource-rich economy. Energy Policy, 132, 771–781. https://doi.org/10.1016/j.enpol.2019.05.054
33. Penn World Table. (2020). Penn World Table. https://doi.org/doi.org/10.15141/S50T0R
34. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
35. Republic of Turkey Ministry of Energy and Natural Resources. (n.d.). Transit Pipelines and Projects. Retrieved May 30, 2020, from https://www.enerji.gov.tr/en-US/Pages/Transit-Pipelines-and-Projects
36. Sadorsky, P. (1999). Oil price shocks and stock market activity. Energy Economics, 21(5), 449–469. https://doi.org/10.1016/S0140-9883(99)00020-1
37. Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a Nonlinear ARDL framework. In Festschrift in Honor of Peter Schmidt (pp. 281–314). New York, NY: Springer New York. https://doi.org/10.1007/978-1-4899-8008-3_9
38. Song, Y., Zhang, M., & Sun, R. (2019). Using a new aggregated indicator to evaluate China’s energy security. Energy Policy, 132, 167–174. https://doi.org/10.1016/j.enpol.2019.05.036
39. Sovacool, B. K., & Mukherjee, I. (2011). Conceptualizing and measuring energy security: A synthesized approach. Energy, 36(8), 5343–5355. https://doi.org/10.1016/j.energy.2011.06.043
40. Stavytskyy, A., Kharlamova, G., Giedraitis, V., & Šumskis, V. (2018). Estimating the interrelation between energy security and macroeconomic factors in European countries. Journal of International Studies, 11(3), 217–238. https://doi.org/10.14254/2071-8330.2018/11-3/18
41. Tang, W., Wu, L., & Zhang, Z. (2010). Oil price shocks and their short- and long-term effects on the Chinese economy. Energy Economics, 32(SUPPL. 1), S3–S14. https://doi.org/10.1016/j.eneco.2010.01.002
42. Trademap. (2021). Trede Map. Retrieved March 18, 2021, from https://www.trademap.org
43. Ullah, A., Zhao, X., Kamal, M. A., Riaz, A., & Zheng, B. (2021). Exploring asymmetric relationship between Islamic banking development and economic growth in Pakistan: Fresh evidence from a non‐linear ARDLapproach. International Journal of Finance & Economics, 26(4), 6168–6187. https://doi.org/10.1002/ijfe.2115
44. Varigonda, K. C. (2013). An assessment of the impact of energy insecurity on state stability in India. Energy Policy, 62, 1110–1119. https://doi.org/10.1016/j.enpol.2013.06.091
45. Voser, P. (2012). Energy: The Oxygen of the Economy. In World Economic Forum Energy for Economic Growth Energy Vision Update 2012. Retrieved from http://www3.weforum.org/docs/WEF_EN_EnergyEconomicGrowth_IndustryAgenda_2012.pdf
46. Wang, Q., & Zhou, K. (2017). A framework for evaluating global national energy security. Applied Energy, 188, 19–31. https://doi.org/10.1016/j.apenergy.2016.11.116
47. World Bank. (2021). World Development Indicators. Retrieved March 18, 2021, from https://databank.worldbank.org
48. Yao, L., & Chang, Y. (2014). Energy security in China: A quantitative analysis and policy implications. Energy Policy, 67, 595–604. https://doi.org/10.1016/j.enpol.2013.12.047
49. Yao, L., Shi, X., & Andrews-Speed, P. (2018). Conceptualization of energy security in resource-poor economies: The role of the nature of economy. Energy Policy, 114, 394–402. https://doi.org/10.1016/j.enpol.2017.12.029
50. Yergin, D. (2006). Ensuring Energy Security. Foreign Affairs, 85(2), 69–82. https://doi.org/10.2307/20031912
51. Zhang, D. (2008). Oil shock and economic growth in Japan: A nonlinear approach. Energy Economics, 30(5), 2374–2390. https://doi.org/10.1016/j.eneco.2008.01.006
52. Zhang, Z. (2011). China’s energy security, the Malacca dilemma and responses. Energy Policy, 39(12), 7612–7615. https://doi.org/10.1016/j.enpol.2011.09.033