Electricity consumption and economic growth nexus in Bangladesh: Revisited evidences

In this paper, an attempt is being made to examine the causal relationship between per capita electricity consumption and per capita GDP of Bangladesh using the vector error correction specified Granger causality test to search their short-run, long-run and joint causal relationships for the period of 1971–2008. Empirical findings reveal that there is a short-run unidirectional causal flow running from per capita electricity consumption to per capita GDP without feedback. The presence of a positive short-run causality explains that an increase in electricity consumption directly affects economic activity in Bangladesh. Likewise, results from joint causality exhibit the same as in short-run. By contrast, long-run results show a bi-directional causality running from electricity consumption to economic growth with feedback. These findings can provide essential policy insights to design immediate and long-term growth prospect for Bangladesh keeping in mind its present planned growth strategy and dismal power and energy sector.     

A dynamic panel study of economic development and the electricity consumption-growth nexus

This study examines the relationship between electricity consumption and economic growth for 88 countries categorized into four panels based on the World Bank income classification (high, upper middle, lower middle, and low income) within a multivariate panel framework over the period 1990–2006. The Larsson et al. (2001) panel cointegration test indicates there is a long-run equilibrium relationship between real GDP, coal consumption, real gross fixed capital formation, and the labor force for the high, upper middle, and lower middle income country panels. The results from the panel vector error correction models reveal (1) bidirectional causality between electricity consumption and economic growth in both the short- and long-run for the high income and upper-middle income country panels; (2) unidirectional causality from electricity consumption to economic growth in the short-run, but bidirectional causality in the long-run for the lower-middle income country panel; and (3) unidirectional causality from electricity consumption to economic growth for the low income country panel.     

Oil prices,nuclear energy consumption,and economic growth: New evidence using a heterogeneous panel analysis

This paper applies panel data analysis to examine the short-run dynamics and long-run equilibrium relationships among nuclear energy consumption, oil prices, oil consumption, and economic growth for developed countries covering the period 1971–2006. The panel cointegration results show that in the long run, oil prices have a positive impact on nuclear energy consumption, suggesting the existence of the substitution relationship between nuclear energy and oil. The long-run elasticity of nuclear energy with respect to real income is approximately 0.89, and real income has a greater impact on nuclear energy than do oil prices in the long run. Furthermore, the panel causality results find evidence of unidirectional causality running from oil prices and economic growth to nuclear energy consumption in the long run, while there is no causality between nuclear energy consumption and economic growth in the short run.     

Economic growth-electricity consumption causality in 12 European countries: A dynamic panel data approach

This paper applies recent panel methodology to investigate the long-run and causal relationship between electricity consumption and real GDP for a set of 12 European countries using annual data for the period 1970–2007. The sample countries have moved faster than other neighboring countries towards the creation of a single electricity market over the past 30 years. Energy prices are also included in the study due to their important role in affecting the above variables, thus avoiding the problem of omitted variable bias. Tests for panel unit roots, cointegration in heterogeneous panels and panel causality are employed in a trivariate VECM estimated by system GMM. The results show evidence of a long-run equilibrium relationship between the three series and a negative short-run and strong causality from electricity consumption to GDP. As expected, there is bidirectional causality between energy prices and GDP and weaker evidence between electricity consumption and energy prices. These results support the policies implemented towards the creation of a common European electricity market.     

Energy consumption and economic growth: Evidence from the Commonwealth of Independent States

This study examines the relationship between energy consumption and economic growth for eleven countries of the Commonwealth of Independent States over the period 1991–2005 within a multivariate panel data framework. Based on (Pedroni, 1999) and (Pedroni, 2004) heterogeneous panel cointegration test and corresponding error correction model, cointegration is present between real GDP, energy consumption, real gross fixed capital formation, and labor force with the respective coefficients positive and statistically significant. The results of the error correction model reveal the presence of unidirectional causality from energy consumption to economic growth in the short-run while bidirectional causality between energy consumption and economic growth in the long-run. Thus, the results lend support for the feedback hypothesis associated with the relationship between energy consumption and economic growth.     

Electricity consumption and economic growth in Algeria: A multivariate causality analysis in the presence of structural change

This article addresses the issue of electricity consumption, petroleum price and economic growth in Algeria. The primary objective is to investigate and analyze the causal relationship between electricity consumption (EC), Brent oil price (BOP) and economic growth (GDP) for Algeria over the period of 1971–2010. To examine short-run, long-run and joint causality relationships we used a multivariate cointegration approach based on the recent advances in time series econometrics (e.g., Zivot–Andrews test; Gregory–Hansen cointegration test; Vector Error Correction Models (VECM)). The empirical results show that there is evidence of short-run and a strong long-run bi-directional causal relationship between EC and real GDP in Algeria. Findings indicate also the absence of causal relationship between BOP and EC. Our empirical findings support the idea that there a link between electricity consumption and economic growth and disproves the neo-classical assumption referred to as the “neutrality hypothesis”.     

Panel estimation for CO2 emissions,energy consumption,economic growth,trade openness and urbanization of newly industrialized countries

This paper empirically examines the dynamic causal relationships between carbon dioxide emissions, energy consumption, economic growth, trade openness and urbanization for the panel of newly industrialized countries (NIC) using the time series data for the period 1971–2007. Using four different panel unit root tests it is found that all panel variables are integrated of order 1. From the Johansen Fisher panel cointegration test it is found that there is a cointegration vector among the variables. The Granger causality test results support that there is no evidence of long-run causal relationship, but there is unidirectional short-run causal relationship from economic growth and trade openness to carbon dioxide emissions, from economic growth to energy consumption, from trade openness to economic growth, from urbanization to economic growth and from trade openness to urbanization. It is found that the long-run elasticity of carbon dioxide emissions with respect to energy consumption (1.2189) is higher than short run elasticity of 0.5984. This indicates that over time higher energy consumption in the newly industrialized countries gives rise to more carbon dioxide emissions as a result our environment will be polluted more. But in respect of economic growth, trade openness and urbanization the environmental quality is found to be normal good in the long-run.     

Electricity consumption and economic growth in seven South American countries

This paper attempts to investigate the causal relationship between electricity consumption and economic growth among seven South American countries, namely Argentina, Brazil, Chile, Columbia, Ecuador, Peru, and Venezuela using widely accepted time-series techniques for the period 1975–2006. The results indicate that the causal nexus between electricity consumption and economic growth varies across countries. There is a unidirectional, short-run causality from electricity consumption to real GDP for Argentina, Brazil, Chile, Columbia, and Ecuador. This means that an increase in electricity consumption directly affects economic growth in those countries. In Venezuela, there is a bidirectional causality between electricity consumption and economic growth. This implies that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in that country. However, no causal relationships exist in Peru. The documented evidence from seven South American countries can provide useful information for each government with regard to energy and growth policy.     

Energy consumption and economic growth: The case of oil exporting countries

This paper examines the causal relationship between the per capita energy consumption and the per capita GDP in a panel of 11 selected oil exporting countries by using panel unit-root tests and panel cointegration analysis. The results show a unidirectional strong causality from economic growth to energy consumption for the oil exporting countries. The findings have practical policy implications for decision makers in the area of macroeconomic planning. In most major oil exporting countries, government policies keep domestic prices bellow free market level, resulting in high levels of domestic energy consumption. The results imply that the energy conservation through reforming energy price policies has no damaging repercussions on economic growth for this group of countries.     

The short and long run causality relationship among economic growth,energy consumption and financial development: Evidence from South Mediterranean Countries (SMCs)

This study aims at examining the short-run and long-run causal link between economic growth, energy consumption and financial development by using data set of 6 SMCs for the 1995–2015 periods. The basic testing procedure requires four steps: ADF and PP unit root tests, Bound tests for Co-integration, ARDL approach and VECM method. The results confirm cointegration between the variables. It means that the long-run relationship exists. The short-run causal relationships (unidirectional) exist at least once for each country (except Egypt). The Granger causality results for individual countries give mixed results. These results urge for the attention of the policy makers in SMCs to design a comprehensive energy conservation policy to minimize the consequences of massive energy consumption on economic growth by adding financial development.     

CO2 emissions,electricity consumption and output in ASEAN

This study examines the causal relationship between carbon dioxide emissions, electricity consumption and economic growth within a panel vector error correction model for five ASEAN countries over the period 1980–2006. The long-run estimates indicate that there is a statistically significant positive association between electricity consumption and emissions and a non-linear relationship between emissions and real output, consistent with the environmental Kuznets curve. The long-run estimates, however, do not indicate the direction of causality between the variables. The results from the Granger causality tests suggest that in the long-run there is unidirectional Granger causality running from electricity consumption and emissions to economic growth. The results also point to unidirectional Granger causality running from emissions to electricity consumption in the short-run.     

Renewable and non-renewable energy consumption and economic activities: Further evidence from OECD countries

This article examines the dynamic relationship between renewable and non-renewable energy consumption and industrial output and GDP growth in OECD countries using data over the period of 1980–2011. The panel cointegration technique allowing structural breaks is used for empirical investigation. The results show that there is a long-term equilibrium relationship among non-renewable and renewable energy sources, industrial output and economic growth. The panel causality analyses show bidirectional causality between industrial output and both renewable and non-renewable energy consumption in the short and long run. However, there is evidence of bidirectional short-run relationship between GDP growth and non-renewable energy consumption while unidirectional causality between GDP growth and renewable energy consumption. These results indicate that OECD economies still remain energy-dependent for their industrial output as well as overall economic growth. However, expansion of renewable energy sources is a viable solution for addressing energy security and climate change issues, and gradually substituting renewable to non-renewable energy sources could enhance a sustainable energy economy.     

Causal relationship between trade openness,economic growth and energy consumption: A panel data analysis of Asian countries

This paper explores the causal relationship between economic growth, trade openness and energy consumption using data of 15 Asian countries. The study covers the period of 1980–2011. We have applied panel cointegration and causality approaches to examine the long-run and causal relationship between variables.Empirical results confirm the presence of cointegration between variables. The impact of economic growth and trade openness on energy consumption is found to be positive. The panel Granger causality analysis reveals the bidirectional causality between economic growth and energy consumption, trade openness and energy consumption.     

Electricity consumption and economic growth nexus in Portugal using cointegration and causality approaches

The aim of this paper is to re-examine the relationship between electricity consumption, economic growth, and employment in Portugal using the cointegration and Granger causality frameworks. This study covers the sample period from 1971 to 2009. We examine the presence of a long-run equilibrium relationship using the bounds testing approach to cointegration within the Unrestricted Error-Correction Model (UECM). Moreover, we examine the direction of causality between electricity consumption, economic growth, and employment in Portugal using the Granger causality test within the Vector Error-Correction Model (VECM). As a summary of the empirical findings, we find that electricity consumption, economic growth, and employment in Portugal are cointegrated and there is bi-directional Granger causality between the three variables in the long-run. With the exception of the Granger causality between electricity consumption and economic growth, the rest of the variables are also bi-directional Granger causality in the short-run. Furthermore, we find that there is unidirectional Granger causality running from economic growth to electricity consumption, but no evidence of reversal causality.     

Energy consumption and economic growth in Central America: Evidence from a panel cointegration and error correction model

This study examines the relationship between energy consumption and economic growth for six Central American countries over the period 1980–2004 within a multivariate framework. Given the relatively short span of the time series data, a panel cointegration and error correction model is employed to infer the causal relationship. Based on the heterogeneous panel cointegration test by Pedroni (Pedroni, P., 1999. Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics 61, 653–670; Pedroni, P., 2004. Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis: new results. Econometric Theory 20, 597–627), cointegration is present between real GDP, energy consumption, the labor force, and real gross fixed capital formation with the respective coefficients positive and statistically significant. The Granger-causality results indicate the presence of both short-run and long-run causality from energy consumption to economic growth which supports the growth hypothesis.     

Electricity consumption and economic growth: a time series experience for 17 African countries

While the availability of electricity by itself is not a panacea for the economic and social problems facing Africa, the supply of electricity is nevertheless believed to be a necessary requirement for Africa's economic and social development. This paper tests the long-run and causal relationship between electricity consumption per capita and real gross domestic product (GDP) per capita for 17 African countries for the period 1971–2001 using a newly developed cointegration test proposed by Pesaran et al. (2001) and using a modified version of the Granger causality test due to Toda and Yamamoto (1995). The advantage of using these two approaches is that they both avoid the pre-testing bias associated with conventional unit root and cointegration tests. The empirical evidence shows that there was a long-run relationship between electricity consumption per capita and real GDP per capita for only 9 countries and Granger causality for only 12 countries. For 6 countries there was a positive uni-directional causality running from real GDP per capita to electricity consumption per capita; an opposite causality for 3 countries and bi-directional causality for the remaining 3 countries. The result should, however, be interpreted with care as electricity consumption accounts for less than 4% of total energy consumption in Africa and only grid-supplied electricity is taken into account.     

Energy consumption and economic activities in Iran

The causal relationship between overall GDP, industrial and agricultural value added and consumption of different kinds of energy are investigated using vector error correction model for the case of Iran within 1967–2003. A long-run unidirectional relationship from GDP to total energy and bidirectional relationship between GDP and gas as well as GDP and petroleum products consumption for the whole economy was discovered. Causality is running from value added to total energy, electricity, gas and petroleum products consumption and from gas consumption to value added in industrial sector. The long-run bidirectional relations hold between value added and total energy, electricity and petroleum products consumption in the agricultural sector. The short-run causality runs from GDP to total energy and petroleum products consumption, and also industrial value added to total energy and petroleum products consumption in this sector.     

The relationship between GDP and electricity consumption in 10 Asian countries

The purpose of this study is to estimate the relationships between GDP and electricity consumption in 10 newly industrializing and developing Asian countries using both single data sets and panel data procedures. The empirical results from single data set indicate that the causality directions in the 10 Asian countries are mixed while there is a uni-directional short-run causality running from economic growth to electricity consumption and a bi-directional long-run causality between electricity consumption and economic growth if the panel data procedure is implemented. These empirical findings imply that electricity conservation policies through both rationalizing the electricity supply efficiency improvement to avoid the wastage of electricity and managing demand side to reduce the electricity consumption without affecting the end-user benefits could be initiated without adverse effect on economic growth. The findings on the long-run relationship indicate that a sufficiently large supply of electricity can ensure that a higher level of economic growth.     

Coal consumption and economic growth: Evidence from a panel of OECD countries

This study examines the relationship between coal consumption and economic growth for 25 OECD countries within a multivariate panel framework over period 1980–2005. The Larsson et al. (2001) panel cointegration test indicates there is a long-run equilibrium relationship between real GDP, coal consumption, real gross fixed capital formation, and the labor force. The respective coefficients for real gross fixed capital formation and the labor force are positive and statistically significant whereas the coefficient for coal consumption is negative and statistically significant. The results of the panel vector error correction model reveal bidirectional causality between coal consumption and economic growth in both the short- and long-run; however, the bidirectional causality in the short-run is negative.     

Renewable energy consumption and economic growth: Evidence from a panel of OECD countries

This study examines the relationship between renewable energy consumption and economic growth for a panel of twenty OECD countries over the period 1985–2005 within a multivariate framework. Given the relatively short span of the time series data, a panel cointegration and error correction model is employed to infer the causal relationship. The heterogeneous panel cointegration test reveals a long-run equilibrium relationship between real GDP, renewable energy consumption, real gross fixed capital formation, and the labor force with the respective coefficients positive and statistically significant. The Granger-causality results indicate bidirectional causality between renewable energy consumption and economic growth in both the short- and long-run.