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The nexus of ICT, electricity consumption and economic growth in India: an ARDL approach

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  • Sarveshwar Kumar Inani
  • Manas Tripathi

Abstract

This study examines both the short-run and long-run relationship among information and communication technology (ICT), economic growth and electricity consumption using annual time-series data for India for the period 1991-2014. All the variables under study are I (1) as per Dickey-Fuller-Generalised least square unit root test results. For cointegration test and causality analysis, we have used autoregressive distributive lag (ARDL) bounds test and vector error correction model (VECM) Granger causality test respectively. ARDL test results suggest that ICT stimulates economic growth in the short-run but not in the long-run, whereas electricity consumption has significant and positive impact on economic growth in the long-run and short-run as well, which supports the energy-led growth hypothesis. However, there is no cointegration when electricity consumption becomes a dependent variable and other variables are independent. Economic growth does not Granger cause electricity consumption in the short-run. These findings suggest that India should focus on ICT expansion to accelerate economic growth in short-run and India should not follow energy conservation policies as it might adversely impact economic growth in both short- and long-run. Instead, India should focus on energy efficient policies. This study has crucial policy implications. Hence, proper balance and coordination among ICT policy, energy policy, and economic growth policy are recommended.

Suggested Citation

  • Sarveshwar Kumar Inani & Manas Tripathi, 2017. "The nexus of ICT, electricity consumption and economic growth in India: an ARDL approach," International Journal of Indian Culture and Business Management, Inderscience Enterprises Ltd, vol. 14(4), pages 457-479.
    • Handle: RePEc:ids:ijicbm:v:14:y:2017:i:4:p:457-479
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    Citations

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    Cited by:

    1. Ahmed Oluwatobi Adekunle & Biliqees Ayoola Abdulmumin & Joseph Olorunfemi Akande & Kehinde Gabriel Ajose, 2022. "Modelling Aggregate Energy Consumption for Growth in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 389-395, November.
    2. Ebenezer Olamide & Kanayo K. Ogujiuba & Andrew Maredza & Phetole Semosa, 2022. "Poverty, ICT and Economic Growth in SADC Region: A Panel Cointegration Evaluation," Sustainability, MDPI, vol. 14(15), pages 1-15, July.
    3. Sahar Afshan & Arshian Sharif & Abdelmohsen A. Nassani & Muhammad M. Q. Abro & Rubeena Batool & Khalid Zaman, 2021. "The role of information and communication technology (internet penetration) on Asian stock market efficiency: Evidence from quantile‐on‐quantile cointegration and causality approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2307-2324, April.
    4. Wen-Cheng Lu, 2018. "The impacts of information and communication technology, energy consumption, financial development, and economic growth on carbon dioxide emissions in 12 Asian countries," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 23(8), pages 1351-1365, December.
    5. Erly Leiwakabessy & Rukmuin Wilda Payapo, 2022. "The Dynamic Link of Energy Consumption, Economic Growth and Poverty in Eastern Indonesia: Panel VECM and FMOLS Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 83-90, March.
    6. Bester Chimbo, 2020. "Information and Communication Technology and Electricity Consumption in Transitional Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 296-302.
    7. Amaluddin Amaluddin, 2020. "The Dynamic Link of Electricity Consumption, Internet Access and Economic Growth in 33 Provinces of Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 309-317.

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