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A Dynamic Causality Study between Electricity Consumption and Economic Growth for Global Panel: Evidence from 76 Countries

Author

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  • Md. Sharif Hossain
  • Chikayoshi Saeki

Abstract

This paper empirically examines the dynamic causal relationships between electricity consumption and economic growth for five different panels (namely high income, upper middle income, lower middle income, low income based on World Bank income classification and global) using time series data from 1960 to 2008. Three panel unit root tests results support that both the variables are integrated of order 1 for all panels except low income panel. Only the variable economic growth is integrated of order 1 for low income panel. The Kao and Johansen Fisher panel conintegration tests results support that both the variables are cointegrated for high income, upper middle income and global panels but for lower middle income and low income panels are not cointegrated. Bidirectional causality between economic growth and electricity consumption both in the short-run and long-run is found for high income, upper middle income and global panels from the Granger causality test results. Unidirectional short-run causality is found from economic growth to electricity consumption for lower middle income panel and no causal relationship is found for low income panel. It is found that the long-run elasticity of economic growth with respect to electricity consumption is higher for high income, upper middle income and for global panels indicates that over times higher electricity consumption gives rise to more economic growth in these panels.

Suggested Citation

  • Md. Sharif Hossain & Chikayoshi Saeki, 2012. "A Dynamic Causality Study between Electricity Consumption and Economic Growth for Global Panel: Evidence from 76 Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(1), pages 1-13.
  • Handle: RePEc:asi:aeafrj:v:2:y:2012:i:1:p:1-13:id:732
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    Citations

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    Cited by:

    1. Rafik Jbir & Lanouar Charfeddine, 2012. "Short Term Relationships between European Electricity Markets," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(2), pages 276-281, June.
    2. Irina Dolgopolova & Qazi Hye & Iyala Stewart, 2014. "Energy consumption and economic growth: evidence from non-OPEC oil producing states," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(2), pages 887-898, March.
    3. Lin, Boqiang & Moubarak, Mohamed, 2014. "Renewable energy consumption – Economic growth nexus for China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 111-117.
    4. Rashid Sbia & Muhammad Shahbaz & Ilhan Ozturk, 2017. "Economic growth, financial development, urbanisation and electricity consumption nexus in UAE," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 30(1), pages 527-549, January.
    5. Maduka, Anne C. & Madichie, Chekwube V. & Ajufo, Ikechukwu H., 2020. "Modelling Household Electricity Consumption and Living Standard in Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 8(2), July.
    6. Shahbaz, Muhammad & Hye, Qazi Muhammad Adnan & Tiwari, Aviral Kumar & Leitão, Nuno Carlos, 2013. "Economic growth, energy consumption, financial development, international trade and CO2 emissions in Indonesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 109-121.
    7. repec:eco:journ2:2017-04-15 is not listed on IDEAS
    8. Rabab Mudakkar, Syeda & Zaman, Khalid & Shakir, Huma & Arif, Mariam & Naseem, Imran & Naz, Lubna, 2013. "Determinants of energy consumption function in SAARC countries: Balancing the odds," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 566-574.
    9. Mohamed A. Alshami & Ariba Sabah, 2020. "The Strategic Importance of Energy Consumption to Economic Growth: Evidence from the UAE," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 114-119.
    10. Bilgili, Faik, 2015. "Business cycle co-movements between renewables consumption and industrial production: A continuous wavelet coherence approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 325-332.

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