RESEARCH ARTICLE Linear and non-linear impact of Internet usage and financial deepening on electricity consumption for Turkey: empirical evidence from asymmetric causality Faisal Faisal 1,2 & Turgut Tursoy 1 & Niyazi Berk 3 Received: 23 October 2017 /Accepted: 19 January 2018 # Springer-Verlag GmbH Germany, part of Springer Nature 2018 Abstract This study investigates the relationship between Internet usage, financial development, economic growth, capital and electricity consumption using quarterly data from 1993Q1 to 2014Q4. The integration order of the series is analysed using the structural break unit root test. The ARDL bounds test for cointegration in addition to the Bayer–Hanck (2013) combined cointegration test is applied to analyse the existence of cointegration among the variables. The study found strong evidence of a long-run relationship between the variables. The long-run results under the ARDL framework confirm the existence of an inverted U-shaped relationship between financial development and electricity consumption, not only in the long-run, but also in the short-run. The study also confirms the existence of a U-shaped relationship between Internet usage and electricity consumption; however, the effect is insignificant. Additionally, the influence of trade, capital and economic growth is examined in both the long run and short run (ARDL-ECM). Finally, the results of asymmetric causality suggest a positive shock in electricity consumption that has a positive causal impact on Internet usage. The authors recommend that the Turkish Government should direct financial institutions to moderate the invest- ment in the ICT sector by advancing credits at lower cost for purchasing energy-efficient technologies. In doing so, the Turkish Government can increase productivity in order to achieve sustainable growth, while simultaneously reducing emissions to improve environmental quality. Keywords ARDL . Combine cointegration . Asymmetric causality . Internet usage . Financial deepening Introduction The literature on energy economics investigating the empirical relationship between economic growth and information and communication technology (ICT) has started to gather mo- mentum in recent decades. Moyer and Hughes ( 2012) emphasised the importance of ICT, which has significantly influenced people’ s lives on a global scale. Shahiduzzaman and Alam (2014a, b) further highlighted that the expansion and innovation in the information technology can enable an economy to significantly increase production, which can sub- sequently upsurge economic growth and in turn can enable the efficient use of energy (Moyer and Hughes 2012). Theoretical literature on the energy and ICT relationship has been available since the 1950s. However, no significant studies were conducted until the 1990s to investigate the relationship between ICT and energy. Since that time, many studies have explored and investigated the impact of ICT on Responsible editor: Philippe Garrigues * Faisal Faisal faisal.faisal@neu.edu.tr Turgut Tursoy turgut.tursoy@neu.edu.tr Niyazi Berk niyazi.berk@eas.bau.edu.tr 1 Department of Banking and Finance, Near East University, North Cyprus Mersin 10, Turkey 2 Institute of Business Studies and Leadership, Abdul Wali Khan University, Mardan, Pakistan 3 Department of Business, Bahcesehir University, Istanbul, Turkey Environmental Science and Pollution Research https://doi.org/10.1007/s11356-018-1341-7