THE RELATIONSHIP BETWEEN ENERGY CONSUMPTION, CLEAN ENERGY AND CO2 EMISSIONS TO FINANCIAL OPENNESS: THE CASE OF TURKEY

The financial liberalization process in Turkey which has been completed with the completely liberalization of international capital flows in the late 1980s has made the country open financially outward. Since 1980s, this situation has especially caused the emergence of a number of effects on and changes in Turkey's standard of living, the production structure and methods of doing business and it has also greatly influenced the amount of energy consumed and emitted carbon dioxide emission. The purpose of this study is to put forward the long term and causality relationship between, energy consumption, clean energy and CO2 emissions to financial openness by considering the period 1974-2016 for Turkey. In this context, indicator of financial openness as dependent variable and indicators of energy consumption, amount of carbon dioxide emission and oil and hydroelectric consumption representing clean energy as independent variable have been used. The existence of a long-run relationship between variables in the study has been explored by Maki (2012) Cointegration test with multiple structural breaks, it has been determined that there is a long-run relationship between variables. For this reason, the coefficient estimation for the long-run relationship between the variables has been made with the FMOLS cointegration coefficient estimator by adding structural breaks which are obtained from the cointegration test to the model. As a result of this test, it has been found that there is a positive relationship between the variables in the long term and the effects of the structural breaks in 2001 and 2009 on long-run relationship are negative and the structural break in 2006 on long-run relationship is positive. In addition, the existence of the causality relation between the variables has been analyzed by using the Fourier Granger causality test in the study. It has been concluded that there is a one-way causality relationship from CO2 emissions, energy consumption and hydroelectric consumption to financial openness. As a result, these findings from analyses have confirmed that the current hypothesis of growth in Turke