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

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).

Keywords

• Finance
• Trade
• Truncating LASSO

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

Abstract

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.

Keywords

• Finans
• Ticaret
• Kesik LASSO

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