The effects of renewable energy sources on Turkiye's economic growth: ARDL estimation

Hydroelectric power plants have been in use for more than a century in countries with rich river resources owing to their cheaper installation costs. Hydroelectric power plants, which have particular importance for the economic growth of developing countries, have been generating electricity in Turkiye over many decades, since the early 1900s. The ultimate objective of the study is to observe the relationship between Turkiye's hydroelectric power generation and its economic growth, which is rarely addressed in the literature, by using recent data. Aimed in the empirical analysis are to test the impact of renewable energy use on economic growth in Turkiye between the years 1965 and 2019 and, in particular, to determine the role and importance of hydroelectric energy, which has an important historical background in respect of Turkish economy, in this relationship. In the analysis part of the study, firstly, unit root analyses were performed, and the ARDL estimator was made, which is the most appropriate estimator among the series with different orders of stationarity. In addition to the diagnostic tests showing whether the ARDL estimator was an appropriate estimator, findings with respect to causality between the variables were revealed with the Toda-Yamamoto causality test, which allows for different orders of stationarity of the series. According to the results of the ARDL estimator, which allows to examine the short and long-term results of the independent variables, it was concluded that renewable energy had no significant effect on economic growth in the long and short run, while hydroelectric energy has increased economic growth in the long run in the analyzed period. In Turkiye, which is highly dependent on foreign for energy production, the contribution of energy consumption to economic growth in the long run was found to be negative.