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Causality Analysis between Electricity Consumption, Real Gross Domestic Product, Foreign Direct Investment, Human Development and Remittances in Colombia, Ecuador and Mexico

Author

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  • Daniel A. Sanchez-Loor
  • Manuel A. Zambrano-Monserrate

    (Escuela Superior Polit cnica del Litoral, ESPOL, Facultad de Ciencias Sociales y Human sticas, Campus Gustavo Galindo Km 30.5 V a Perimetral, P.O. Box 09-01-5863, Guayaquil, Ecuador.)

Abstract

This paper examines the relationship between electricity consumption (EC), gross domestic product (GDP), foreign direct investment (FDI), human development index (HDI) and remittances (RMT) for Colombia, Ecuador and Mexico using annual data from 1980 to 2012. Previous literature oversees the relevance of RMT in Latin America and the urgent need to improve HDI levels when analyzing EC and GDP linkages. Time series techniques test the causal relationships direction and its interaction sign. In Colombia there are two unidirectional causalities running from HDI to EC and GDP to FDI generating a positive effect, and bidirectional causality between HDI and RMT refl ecting an enhancing feedback in the long-run. In Ecuador, a unidirectional direct causality from EC to GDP and a negative impact from RMT to GDP characterize for the long-run interaction. In Mexico, EC causes FDI in the short-run within a positive interaction, and FDI and HDI sustain short-run unidirectional causalities affecting RMT negatively exerted from FDI and positively from HDI. After reviewing the results, the author suggests policies to each country.

Suggested Citation

  • Daniel A. Sanchez-Loor & Manuel A. Zambrano-Monserrate, 2015. "Causality Analysis between Electricity Consumption, Real Gross Domestic Product, Foreign Direct Investment, Human Development and Remittances in Colombia, Ecuador and Mexico," International Journal of Energy Economics and Policy, Econjournals, vol. 5(3), pages 746-753.
    • Handle: RePEc:eco:journ2:2015-03-14
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    Cited by:

    1. MT Musakwa & N.M. Odhiambo, 2021. "Energy Consumption and Human Development in South Africa: Empirical Evidence from Disaggregated Data," Working Papers AESRI-2021-12, African Economic and Social Research Institute (AESRI), revised Oct 2021.
    2. Musakwa Mercy T. & Odhiambo Nicholas M., 2022. "Energy Consumption and Human Development in South Africa: Empirical Evidence from Disaggregated Data," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(2), pages 1-23, June.
    3. Al Aali-Bujari & Francisco Venegas-Mart nez & Roberto J. Santill n-Salgado, 2018. "On the Stock Market-Electricity Sector Nexus in Latin America: A Dynamic Panel Data Model," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 148-154.
    4. Musakwa, Mercy T & Odhiambo, Nicholas M, 2021. "Energy consumption and human development in South Africa: Empirical evidence from disaggregated data," Working Papers 28233, University of South Africa, Department of Economics.
    5. Mercy T. Musakwa & Nicholas M. Odhiambo, "undated". "Energy Consumption And Human Development In South Africa: Empirical Evidence From Disaggregated Data," Working Papers AESRI03, African Economic and Social Research Institute (AESRI).
    6. Mahmut Unsal Sasmaz & Emre Sakar & Yunus Emre Yayla & Ulas Akkucuk, 2020. "The Relationship between Renewable Energy and Human Development in OECD Countries: A Panel Data Analysis," Sustainability, MDPI, vol. 12(18), pages 1-16, September.
    7. Musakwa, Mercy T & Odhiambo, Nicholas M, 2019. "Remittance and poverty nexus in Botswana: A multivariate approach," Working Papers 25749, University of South Africa, Department of Economics.

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    More about this item

    Keywords

    Electricity Consumption; Gross Domestic Product; Foreign Direct Investment; Human Development Index; Remittances;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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