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Examining The Relationship between Electricity Consumption, Financial Development and Economic Growth in ASEAN Countries: Evidence from a Bayesian Analysis

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  • Canh Chi Hoang

    (Faculty of Business Administration, University of Finance - Marketing, Ho Chi Minh City, Vietnam.)

Abstract

The literature has suggested that financial development and electricity consumption are key determinants of economic growth. However, existing studies usually was applied the frequentist inference, which is an outdated estimator. By applying the Bayesian approach via the Metropolis-Hasting and Gibbs samplers as the MCMC methods, the study aims to re-examine the impact of financial development and electricity consumption on economic growth in ASEAN+6 countries from 1980 to 2016. The obtained outcome shows that the impact of both financial development and electricity consumption is strong and positive on economic growth. There is a uni-directional causality running from economic growth to energy consumption, supported the Conversation hypothesis. Based on the empirical result, several policy implications are suggested for emerging countries, ASEAN+6 nations, in particular.

Suggested Citation

  • Canh Chi Hoang, 2021. "Examining The Relationship between Electricity Consumption, Financial Development and Economic Growth in ASEAN Countries: Evidence from a Bayesian Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 49-56.
    • Handle: RePEc:eco:journ2:2021-02-6
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    Citations

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    Cited by:

    1. Oksana V. Savchina & Dmitriy A. Pavlinov & Olga V. Savchina, 2021. "Financial Stability of Electricity Companies in the Context of the Macroeconomic Instability and the COVID-19 Pandemic," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 85-98.
    2. Abdulkadir Abdulrashid Rafindadi & Isah Buhari Aliyu & Ojonugwa Usman, 2022. "Revisiting the electricity consumption-led growth hypothesis: is the rule defied in France?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-23, December.
    3. Pruethsan Sutthichaimethee & Chanintorn Jittawiriyanukoon, 2022. "The Impact of Causal Factors Relationship over the Changes in Future Scenario Management under the Sustainability Policy of Thailand," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 36-46, September.

    More about this item

    Keywords

    Financial development; Energy consumption; Economic growth; Bayesian; ASEAN countries.;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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