The Environmental Quality-Economic Complexity Relationship: A Fourier Cointegration Analysis of the Turkish Economy
Sefa Özbek, Mustafa NaimoğluThis study investigates the relationship between environmental quality and economic complexity using the variables of annual economic growth, economic complexity index, energy consumption, and ecological footprint of the Turkish economy for the 1964-2018 period. This study has preferred the Fourier autoregressive distributed lag (ADL) method, which Banerjee et al. (2017) introduced to the literature. The unit root processes of the variables added to the model were investigated using both conventional and Fourier unit root tests. As a result of the Fourier ADL cointegration test, a long-term relationship was found to exist among the variables. The fully modified ordinary least square (FMOLS) test was used to estimate the short- and longterm coefficients. Empirical findings have revealed energy consumption in Turkiye during this sample period to have increased the ecological footprint both in the short and long terms. The result was obtained that economic complexity increased the ecological footprint in the short run while decreasing in the long run. Meanwhile, short-term elasticity of economic growth (0.90%) was concluded to be greater compared to long-term elasticity (0.24%), and validity of the environmental Kuznets curve (EKC) hypothesis was obtained for Turkiye.
Çevre Kalitesi-Ekonomik Karmaşıklık İlişkisi: Türkiye Ekonomisi Üzerine Fourier Eşbütünleşme Analizi
Sefa Özbek, Mustafa NaimoğluBu çalışmada çevre kalitesi ile ekonomik karmaşıklık endeksi arasındaki ilişki araştırılmaktadır. Çalışmada Türkiye ekonomisine ait 1964-2018 dönemi yıllık ekonomik büyüme, ekonomik karmaşıklık endeksi, enerji tüketimi ve ekolojik ayak izi değişkenleri kullanılmaktadır. Ampirik yöntem olarak Banerjee vd. (2017) tarafından literatüre kazandırılan Fourier ADL yöntemi tercih edilmektedir. Modele ilave edilen değişkenlerin birim kök süreçleri hem geleneksel hem de Fourier birim kök testleriyle araştırılmıştır. Fourier ADL eşbütünleşme testi sonucu değişkenler arasında uzun dönemli bir ilişkinin varlığına ulaşılmıştır. Kısa ve uzun dönem katsayı tahmininde Tamamen Geliştirilmiş En Küçük Kareler Yönteminden (FMOLS) yararlanılmıştır. Ampirik bulgular Türkiye’de söz konusu örneklem döneminde enerji tüketiminin hem kısa hem de uzun dönemde ekolojik ayak izini artırdığını ortaya koymuştur. Ekonomik karmaşıklığın ise uzun dönemde ekolojik ayak izini düşürdüğü; kısa dönemde artırdığı sonucu elde edilmiştir. Diğer taraftan ekonomik büyümenin kısa dönem esnekliğinin (%0.90) ise uzun dönem esnekliğinden (%0.24) daha büyük olduğu sonucuna ulaşılmış, Türkiye için Çevresel Kuznets Eğrisi (ÇKE) hipotezinin geçerliliği elde edilmiştir.
The worldwide ecological deficit is seen to have begun occurring in the 1970s and to have deepened in the 2000s when globalization and industrialization reached high levels. In parallel with the global developments, the ecological openness is observed to have increased in Turkiye with the effects of globalization and industrialization (Global Footprint Network, 2021). Ecological openness began being seen in Turkiye in the 1980s. The process of converting Turkiye’s national currency occurred with the start of commercial liberalization in the Turkish economy in the 1980s. In the 1990s, many obstacles to capital movements were lifted in many countries, including Turkiye. Therefore, the globalization process was seen to have increased all over the world alongside the increase in liberalization, first commercially and then financially. With this process, developments such as increased industrialization, energy consumption, and economic growth have led to an increase in variables such as carbon emissions and ecological footprint, which in turn leads to an increase in ecological openness. In addition to economic growth and energy consumption, this study also investigates the determinants of ecological footprint using the variable of the economic complexity index (ECI). This aspect of the study is thought to contribute to the literature . Meanwhile, other unique aspects of the study are its use of the Fourier ADL cointegration method that has recently been brought to the literature and how it benefits from a current data set.
The variable of CO2 emissions is observed to have been frequently used as an environmental quality indicator (Ulucak & Erdem, 2012; Mikayilov et al., 2018; Yurtkuran, 2021). CO2 emissions expresses how greenhouse gases are released into the atmosphere. Variables such as carbon footprint, ecological footprint, biomass, and solid waste are also frequently used in in addition to CO2 emissions (Aşıcı & Acar, 2016; Ulucak & Erdem, 2017; Destek, 2018). Many studies are found to have examined the relationship CO2 emissions as an environmental degradation or environmental quality indicator has with other macroeconomic variables. These studies are seen to have mostly been examined within the scope of the Kuznets curve. The relationship between CO2 emissions and economic growth was determined to have been frequently examined, especially with regard to various forms of the environmental Kuznets curve (EKC; Başar & Temurlenk, 2007; Halicioğlu, 2009; Saatçi & Dumrul, 2011; Öztürk & Acaravcı, 2013; Shahbaz et al., 2013; Dal et al., 2013; Koçak, 2014; Tutulmaz, 2015; Bölük & Mert, 2015; Albayrak & Gökçe, 2015; Yurttagüler & Kutlu, 2017; Ceylan & Karaağaç, 2020). These studies are seen to have investigated the validity of the inverse-U relationship using the variables of CO2 emissions, per capita income, and the per capita income squared. Another model for the validity of the environmental Kuznets curve involves studies that have investigated the validity of the cubic form (Şahinöz & Fotourehchi, 2013; Allard et al., 2018; Manga & Cengiz, 2020; Özdemir & Koç, 2020; Güzel, 2021).
In addition to the square form, these studies added the cubed income per capita as a variable to the model, tested the model, and investigated the validity of the N-shaped EKC. Some studies such as Rudolph and Figge (2017), Figge et al. (2017), Ulucak and Bilgili (2018), Destek (2018), Destek and Sarkodie (2019), Baloch et al. (2019), Alola et al. (2019), Apaydın (2020), Yılancı and Pata, (2020) Shahzad et al. (2020), and Gulmez et al. (2021) have examined the relationship between ecological footprint and various socio-economic indicators.
This study investigates the relationship between the economic complexity index and ecological footprint in the Turkish economy using 1990-2019 period data. The study has attempted to obtain a wide range of results by adding the variables of energy consumption and economic growth to the model as some important variables that determine the ecological footprint. The political and economic shocks that could cause structural breaks in the Turkish economy over the studied period have necessitated the use of both traditional augmented Dickey-Fuller (ADF) and Fourier ADF unit root tests in the unit root process research. According to the stationarity results, all variables become stationary after taking the first difference. Therefore, the degree of integration of all variables is I(1). For the long-term relationship between the variables (Banerjee et al., 2017), the Fourier ADL cointegration test, which was brought to the literature, was used. Empirical findings have revealed the existence of a cointegration relationship. . The FMOLS test was used to estimate the effects the independent variable included in the model have on the ecological footprint. The FMOLS results indicate that, during the studied sample period, the ecological footprint in Turkiye was increased both in the short and long term by energy consumption and that economic complexity increased the ecological footprint in the short run while increasing it in the long run. Meanwhile, the short-term elasticity of economic growth was concluded to be greater than the long-term elasticity.
