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The Nexus between Electricity Consumption and Economic Growth in Bahrain

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  • Hamdi, Helmi
  • Sbia, Rashid
  • Shahbaz, Muhammad

Abstract

This paper explores the relationship between electricity consumption, foreign direct investment, capital and economic growth in case of the Kingdom of Bahrain. The Cobb-Douglas production is used over the period of 1980Q1–2010Q4. We have the ARDL bounds testing approach and found that cointegration exists among the series. Electricity consumption, foreign direct investment and capital add in economic growth. The VECM Granger causality analysis has reported the feedback effect between electricity consumption and economic growth and same is true for foreign direct investment and electricity consumption. This suggests us to explore sources of energy to achieve sustainable economic development for long run.

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  • Hamdi, Helmi & Sbia, Rashid & Shahbaz, Muhammad, 2013. "The Nexus between Electricity Consumption and Economic Growth in Bahrain," MPRA Paper 48472, University Library of Munich, Germany, revised 19 Jul 2013.
    • Handle: RePEc:pra:mprapa:48472
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    Keywords

    Electricity Consumption; Economic Growth; Foreign Direct Investment; Bahrain;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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