The study presented at the congress, titled "THE RELATIONSHIP BETWEEN RENEWABLE ENERGY CONSUMPTION, FINANCIAL DEVELOPMENT, AND ECONOMIC GROWTH: AN EMPIRICAL ANALYSIS ON TURKIYE AND AZERBAIJAN," focuses on today's most critical global challenges. Energy demand driven by industrialization, urbanization, and a growing population exacerbates environmental problems such as climate change and energy supply security by increasing dependence on non-renewable resources. Renewable energy is of vital strategic importance not only for mitigating environmental problems but also for creating new employment opportunities, ensuring financial stability, and ensuring long-term economic growth sustainability.
This study examines the relationship between renewable energy consumption, financial development, and economic growth in Türkiye (1990-2021) and Azerbaijan (1992-2021) using asymmetric causality analysis developed by Hatemi-J.
The striking results obtained for Türkiye indicate that:
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A negative shock (decrease) in renewable energy consumption positively affects financial development.
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Conversely, a positive shock in financial development negatively affects renewable energy consumption.
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Furthermore, a negative shock in renewable energy consumption has an enhancing effect on economic growth.
The findings for Azerbaijan indicate that:
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A positive shock to financial development negatively impacts renewable energy consumption.
This empirical analysis provides critical data for policymakers by clearly revealing the differences in the two countries' energy policies and the nature of these relationships. The study will contribute significantly to establishing a concrete foundation for the renewable energy policies that Türkiye and Azerbaijan must address in their future development and growth strategies.
