The Effects of Energy Consumption and Foreign Direct Investments on Economic Growth in Türkiye: Fourier-Shin Cointegration Test

The aim of this study is to explain the impact of shocks in foreign direct investments and per capita energy consumption on real growth shocks in Türkiye between 1970 and 2015. For this purpose, it is planned to evaluate the temporary and permanent effects of the variables on economic growth. To the cointegrated relationship between the variables the Fourier-Shin cointegration test; to determine the stationarity, Augmented Dickey Fuller- Becker, Enders and Lee Fourier KPSS stationarity tests were used. The long-run and short-run coefficients were estimated using the dynamic least squares method (DOLS). According to the findings of the analysis, in the long run, a 1% increase in energy consumption increases economic growth by 0.04%, while a 1% increase in foreign direct investment increases economic growth by 1.6%. In the short run, a 1% increase in FDI increases economic growth by 0.7%. FDI plays a key role for Türkiye's economic growth both in the long and short run. On the other hand, Türkiye needs more permanent energy policies that will cover the long-term rather than short-term energy policies.