Relationship Between Financial Development and Carbon Emissions: Empirical Evidence from Türkiye with Fractional Frequency Fourier Approaches

Year 2024, Volume: 11 Issue: 3, 1212 - 1229, 30.09.2024

Havanur Ergün Tatar , Hamza Çeştepe

https://doi.org/10.30798/makuiibf.1479285

Abstract

Abstract
This study empirically analyzes the relationship between carbon emissions, one of the most important indicators of environmental pollution, and financial development. Using data from Türkiye for the period 1995-2019, the fractional frequency Fourier ADL cointegration method -previously unused in similar studies- is employed for the analysis. The results, which also account for economic growth, demonstrate a cointegration relationship between the variables. Additionally, the FMOLS method is utilized for model estimation, concluding that financial development and growth lead to increased carbon emissions. The study suggests that loans provided to the financial sector should be directed towards technological investments that reduce carbon emissions

Keywords

Carbon Emissions, Financial Development, Fractional Frequency Fourier Cointegration

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