Hydropower Energy Consumption, Financial Development, Foreign Direct Investment, and Economic Growth: Further Evidence from Newly Industrialized Countries

In today's world, the realm and use of renewable energy in the global economy have increasing importance. In this paper, the nexus between hydropower energy consumption (HEC), financial development (FD), foreign direct investment (FDI), and economic growth (EG) for "newly industrialized countries" in the time period between 1979 and 2020 was investigated using Durbin-Hausman (2008) panel cointegration and Emirmahmutoglu and Kose (2011) panel causality tests. According to the obtained findings, there was no cointegration or causality found between HEC and the three macroeconomic indicators (FD, FDI, and EG). Accordingly, the neutrality hypothesis has been found to be valid for the studied panels. On the other hand, when the individual test statistics obtained from the causality test were examined, it has been discovered that different hypotheses such as growth, conservation, feedback, and neutrality are valid for countries. The findings offer important findings for the policymakers of countries that will invest in hydropower energy.