Do financial development and industrialization intensify energy consumption in Turkey?

This study examines the inverted U-shape relationship between financial development and energy intensity for Turkish economy. To this end, ARDL model has been employed to estimate the short-run and long-run coefficients. The Bayer and Hanck (2013) combined cointegration technique and ARDL bounds testing were employed to examine the cointegration association among investigated variables using annual data from 1976 to 2016. The statistically significant and inverted U-shaped association was affirmed between financial development and energy intensity in Turkey. The results also show that financial development has positive and significant effect on energy intensity. The result of Hacker and Hatemi-J (2012) leveraged bootstrap causality test reveals the unidirectional relationship running from financial development to energy intensity in Turkey. However, the feedback causal effect was found between industrialization and energy intensity. Further insights into causal relationship and policy implications are provided in the Conclusion section.