The causal relationship between electricity consumption and economic growth in the ASEAN countries

This paper investigates the causal relationship between electricity consumption and economic growth among the Association of South East Asian Nations (ASEAN) 4 members, namely Indonesia, Malaysia, Singapore, and Thailand, using modern time-series techniques for the period 1971–2002. The results indicate that there is a bi-directional causality between electricity consumption and economic growth in Malaysia and Singapore. This means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in the two countries. However, uni-directional causality runs from economic growth to electricity consumption in Indonesia and Thailand without any feedback effect. Thus, electricity conservation policies can be initiated without deteriorating economic side effects in the two countries.     

Causal relationship between nuclear energy consumption and economic growth: A multi-country analysis

This paper attempts to investigate the causal relationship between nuclear energy consumption and economic growth using the data from six countries among 20 countries that have used nuclear energy for more than 20 years until 2005. To this end, time-series techniques including the tests for unit roots, co-integration, and Granger-causality are employed to Argentina, France, Germany, Korea, Pakistan, and Switzerland. The main conclusion is that the causal relationship between nuclear energy consumption and economic growth is not uniform across countries. In the case of Switzerland, there exists bi-directional causality between nuclear energy consumption and economic growth. This means that an increase in nuclear energy consumption directly affects economic growth and that economic growth also stimulates further nuclear energy consumption. The uni-directional causality runs from economic growth to nuclear energy consumption without any feedback effects in France and Pakistan, and from nuclear energy to economic growth in Korea. However, any causality between nuclear energy consumption and economic growth in Argentina and Germany is not detected.     

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.     

Electricity consumption and economic growth in South Africa: A trivariate causality test

In this paper we examine the causal relationship between electricity consumption and economic growth in South Africa. We incorporate the employment rate as an intermittent variable in the bivariate model between electricity consumption and economic growth—thereby creating a simple trivariate causality framework. Our empirical results show that there is a distinct bidirectional causality between electricity consumption and economic growth in South Africa. In addition, the results show that employment in South Africa Granger-causes economic growth. The results apply irrespective of whether the causality is estimated in the short-run or in the long-run formulation. The study, therefore, recommends that policies geared towards the expansion of the electricity infrastructure should be intensified in South Africa in order to cope with the increasing demand exerted by the country's strong economic growth and rapid industrialisation programme. This will certainly enable the country to avoid unprecedented power outages similar to those experienced in the country in mid-January 2008.     

Electricity consumption and real GDP causality nexus: Evidence from ARDL bounds testing approach for 11 MENA countries

This paper investigates the short-run and long-run causality issues between electricity consumption and economic growth in the selected 11 Middle East and North Africa (MENA) countries by using Autoregressive Distributed Lag (ARDL) bounds testing approach of cointegration and vector error-correction models. It employs annual data covering the period from 1971 to 2006. The unit root tests results indicate that some of the variables for Algeria, Jordan, Tunisia and United Arab Emirates do not satisfy the underlying assumptions of the ARDL bounds testing approach of cointegration methodology before proceeding to the estimation stage. Thus, we drop these countries from the ARDL bounds testing approach of cointegration and causality analysis. The cointegration test results show that there is no cointegration between the electricity consumption and the economic growth in three of the seven countries (Iran, Morocco and Syria). Thus, causal relationship cannot be estimated for these countries. However, the cointegration and causal relationship is found in four countries (Egypt, Israel, Oman and Saudi Arabia). The overall results indicate that there is no relationship between the electricity consumption and the economic growth in most of the MENA countries. Further evidence indicates that policies for energy conservation can have a little or no impact on economic growth in most of the MENA countries.     

Electricity consumption and economic growth: evidence from Korea

This paper investigates the short- and long-run causality issues between electricity consumption and economic growth in Korea by using the co-integration and error-correction models. It employs annual data covering the period 1970–2002. The overall results show that there exists bi-directional causality between electricity consumption and economic growth. This means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption.     

Energy consumption and economic growth: Evidence from the economic community of West African States (ECOWAS)

Access to modern energy is believed to be a prerequisite for sustainable development, poverty alleviation and the achievement of the Millennium Development Goals.However, theoretical models and empirical results offer conflicting evidence on the relationship between energy consumption and economic growth that we remain largely unsure of the cause-and-effect nature of this relationship, if indeed a relationship exists at all.This paper tests, in a panel context, the long-run relationship between energy access, and economic growth for fifteen African countries from 1980 to 2008 by using recently developed panel cointegration techniques.We adopt a three-stage approach, consisting of panel unit root, panel cointegration and Granger causality tests to study the dynamic causal relationships between energy consumption, energy prices and growth as well as relationship between electricity consumption, prices and growth.Results show that GDP and energy consumption as well as GDP and electricity move together in the long-run. By estimating these long-run relationships and testing for causality using panel-based error correction models, we found unidirectional long-run and short-run causality. The causality is running from GDP to energy consumption in the short-run, and from energy consumption to GDP in the long-run. There is also evidence of unidirectional causality running from electricity consumption to GDP in the long-run.This study thus provides empirical evidence of long-run and causal relationships between energy consumption and economic growth for our sample of fifteen countries; suggesting that lack or limited access to modern energy services could hamper economic growth and compromise the development prospects of these countries.     

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.     

Coal consumption and economic growth revisited

This paper revisits the causal relationship between coal consumption and real GDP for six major coal consuming countries for the period 1965–2005 within a vector autoregressive (VAR) framework by including capital and labour as additional variables. Applying a modified version of the Granger causality test due to Toda and Yamamoto [Toda HY, Yamamoto T. Statistical inference in vector autoregressions with possibly integrated process. J Econom 1995;66:225–50], we found a unidirectional causality running from coal consumption to economic growth in India and Japan while the opposite causality running from economic growth to coal consumption was found in China and South Korea. In contrast there was a bi-directional causality running between economic growth and coal consumption in South Africa and the United States. Variance decomposition analysis seems to confirm our Granger causality results. The policy implication is that measures adopted to mitigate the adverse effects of coal consumption may be taken without harming economic growth in China and South Korea. In contrast, for the remaining four countries conservation measures can harm economic growth.     

Renewable energy consumption and economic growth in newly industrialized countries: Evidence from asymmetric causality test

In this study, the relationship between renewable energy consumption and economic growth in newly industrialized countries is examined for the period from 1971 to 2011. In previous studies, the causal relationship between variables was performed by the validity of the assumption of positive shocks. This study employs the asymmetric causality approach to investigate the relationship between positive and negative shocks of variables. The results reveal that negative shocks in renewable energy consumption causes positive shocks in real GDP for South Africa and Mexico; negative shocks in renewable energy consumption causes negative shocks in real GDP for India. In addition, the neutrality hypothesis is confirmed for Brazil and Malaysia.     

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.     

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.     

Electricity consumption and economic growth: Bounds and causality analyses of OPEC members

This paper investigates the relationship between electricity consumption and economic growth for OPEC members. The bounds test yields evidence of a long-run relationship between electricity consumption and economic growth for all OPEC members. Causality results suggest that economic growth is dependent on electricity consumption in five countries, less dependent in three countries, and independent in three countries. Because these countries do not necessarily share similar political and economic traits, no single universal policy implication can be inferred from the results. The disparities across these causality results, therefore, stress the importance of formulating causality explanations while taking into account the particularities of individual countries rather than blindly applying the conventional interpretations.     

Energy consumption,prices and economic growth in three SSA countries: A comparative study

In this paper we examine the causal relationship between energy consumption and economic growth in three sub-Saharan African countries, namely South Africa, Kenya and Congo (DRC). We incorporate prices as an intermittent variable in a bivariate setting between energy consumption and economic growth—thereby creating a simple trivariate framework. Using the ARDL-bounds testing procedure, we find that the causality between energy consumption and economic growth varies significantly across the countries under study. The results show that for South Africa and Kenya there is a unidirectional causal flow from energy consumption to economic growth. However, for Congo (DRC) it is economic growth that drives energy consumption. These findings have important policy implications insofar as energy conservation policies are concerned. In the case of Congo (DRC), for example, the implementation of energy conservation policies may not significantly affect economic growth because the country's economy is not entirely energy dependent. However, for South Africa and Kenya there is a need for more energy supply augmentations in order to cope with the long-run energy demand. In the short-run, however, the two countries should explore more efficient and cost-effective sources of energy in order to address the energy dependency problem.     

Oil consumption and economic growth: Evidence from Pakistan

This study attempts to look into the causal relationship between oil consumption and economic growth in Pakistan where oil consumption and real gross domestic product (GDP) have increased rapidly in recent years. To this end, the study employs annual data covering the period 1965–2015. Tests for unit roots, co-integration, and Granger causality based on the error-correction models (ECMs) are presented. The overall results support the existence of bidirectional causality between oil consumption and economic growth in Pakistan. This means that an increase in oil consumption directly affects economic growth. Thus, in order not to cause an adverse effect on economic growth, Pakistan should endeavor to overcome the constraints on oil consumption. Moreover, it appears that economic growth induces increased oil consumption.     

Factors affecting transport sector CO2 emissions growth in Latin American and Caribbean countries: An LMDI decomposition analysis

This study determines the factors responsible for the growth of transport sector CO₂ emissions in 20 Latin American and Caribbean (LAC) countries during the 1980–2005 period by decomposing the emissions growth into components associated with changes in fuel mix (FM), modal shift and economic growth, as well as changes in emission coefficients (EC) and transportation energy intensity (EI). The key finding of the study is that economic growth and the changes in transportation EI are the principal factors driving transport sector CO₂ emission growth in the countries considered. While economic growth is responsible for the increasing trend of transport sector CO₂ emissions in Argentina, Brazil, Costa Rica, Peru and Uruguay, the transportation EI effect is driving CO₂ emissions in Bolivia, the Caribbean, Cuba, Ecuador, Guatemala, Honduras, Other Latin America, Panama and Paraguay. Both economic activity (EA) and EI effects are found responsible for transport sector CO₂ emissions growth in the rest of the Latin American countries. In order to limit CO₂ emissions from the transportation sector in LAC countries, decoupling of the growth of CO₂ emissions from economic growth is necessary; this can be done through policy instruments to promote fuel switching, modal shifting and reductions in transport sector EI. Copyright © 2008 John Wiley & Sons, Ltd.     

Economic growth and energy consumption revisited — Evidence from linear and nonlinear Granger causality

The relationship between energy consumption and economic growth is considered as an imperative issue in energy economics. Previous studies have ignored the nonlinear behavior which could be caused by structural breaks. In this study, both linear and nonlinear Granger causality tests are applied to examine the causal relationship between energy consumption and economic growth for a sample of Asian newly industrialized countries as well as the U.S. This study finds evidence supporting a neutrality hypothesis for the United States, Thailand, and South Korea. However, empirical evidence on Philippines and Singapore reveals a unidirectional causality running from economic growth to energy consumption while energy consumption may have affected economic growth for Taiwan, Hong Kong, Malaysia and Indonesia. Policy implications are also discussed.     

Economic growth and electricity consumption in Cote d'Ivoire: Evidence from time series analysis

This paper examines the causal relationship between the electric power industry and the economic growth of Cote d'Ivoire. Using the data from 1971 to 2008, a test was conducted for the cointegration and Granger causality within an error correction model. Results from these tests reveal a bidirectional causality between per capita electricity consumption and per capita GDP. A unidirectional causality running from electricity consumption to industry value added appears in the short run. Economic growth is found to have great effects on electricity consumption and a reverse causality from electricity to economic growth may also appear. In the long run, there is a unidirectional causality between electricity and both GDP and industry value added. From these findings, we conclude that the country will be energy dependent in the long run and must therefore secure the production network from shortfalls to ensure a sustainable development path. Accordingly, government should adopt policies aimed at increasing the investment in the sector by stepping up electricity production from existing and new energy sources.     

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.     

The causality between energy consumption and economic growth in Turkey

This paper applies the causality test to examine the causal relationship between primary energy consumption (EC) and real Gross National Product (GNP) for Turkey during 1970–2006. We employ unit root tests, the augmented Dickey–Fuller (ADF) and the Philips–Perron (PP), Johansen cointegration test, and Pair-wise Granger causality test to examine relation between EC and GNP. Our empirical results indicate that the two series are found to be non-stationary. However, first differences of these series lead to stationarity. Further, the results indicate that EC and GNP are cointegrated and there is bidirectional causality running from EC to GNP and vice versa. This means that an increase in EC directly affects economic growth and that economic growth also stimulates further EC. This bidirectional causality relationship between EC and GNP determined for Turkey at 1970–2006 period is in accordance with the ones in literature reported for similar countries. Consequently, we conclude that energy is a limiting factor to economic growth in Turkey and, hence, shocks to energy supply will have a negative impact on economic growth.