The moderating role of informal economy on financial development induced ekc hypothesis in turkey

Memduh Eren B., Katircioglu S., GÖKMENOĞLU KARAKAYA K.

Energy and Environment, 2022 (SSCI) identifier

  • Publication Type: Article / Article
  • Publication Date: 2022
  • Doi Number: 10.1177/0958305x211070775
  • Journal Name: Energy and Environment
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, PASCAL, Aerospace Database, Communication Abstracts, Compendex, Environment Index, Geobase, Greenfile, INSPEC, Metadex, Pollution Abstracts, Civil Engineering Abstracts
  • Keywords: environmental performance, financial development, informal economy, moderating effect
  • Ankara Haci Bayram Veli University Affiliated: Yes


© The Author(s) 2022.This study conducts an empirical investigation about the moderating role of the informal economy on Turkey's environmental performance by employing advanced econometric techniques that account numerous structural breaks in series. In this extent, we created three interaction variables by captivating the impact of informal economic activities on CO2 emissions through income, energy use, and financial sector development. Besides, we built a main effect model without the interaction variables to assess the direct effects of our variables on global environmental degradation. The outcomes of the carried analyses produced supporting evidence toward the confirmation of the Environmental Kuznets Curve (EKC) assumption. Obtained findings shown that energy use, financial development and the informal economy in Turkey transmit a deteriorating impact on environmental well-being. Furthermore, the moderating role of the informal economy was found to be statistically significant factor in terms of both economic and environmental efficiency.