Abstract:

Energy is a concept of great importance for both developed countries and developing and less developed countries. Especially in developing countries such as Turkey, we can say that the main factors required to capture the trend of high economic growth. In this context, the aim of the study is to examine the relationship between energy consumption and financial development, gross domestic product and foreign direct investments. In the study were used the data set of Turkey covering the period 1970-2015. We use Toda and Yamamoto causality tests together with take structural breaks into account unit root tests and cointegration tests in the study. Next, we use a causality test where the stationarity levels of variables and the long-term relationship between variables are not important. According to the findings, it is concluded that financial development affects energy consumption, gross domestic product and foreign direct investments. In addition, it has been determined that energy consumption and gross domestic product affect foreign direct investments. These results inform policy makers that the steps to be taken to improve financial development will positively affect other sectors.

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