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Electricity Consumption, Economic Growth and Trade Openness in Kazakhstan: Evidence from Cointegration and Causality

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  • Khan, Saleheen
  • Jam, Farooq Ahmed
  • Shahbaz, Muhammad
  • Mamun, Md Al

Abstract

We investigate the relation between electricity consumption and economic growth by incorporating trade openness, capital, and labor in production function of Kazakhstan using annual data for 1991-2014. We apply the ARDL bounds testing and the VECM Granger causality approach to examine long run and causality relation between the variables. Our results confirm the existence of long run relation among the series. The empirical evidence reveals that electricity consumption adds in economic growth. Trade openness stimulates economic growth, and capital and labor promote economic growth, as well. The causality analysis shows that electricity consumption Granger causes economic growth and trade openness. We also document feedback effect between trade openness and economic growth. Our study provides new insights for policy makers to articulate a comprehensive economic, trade and energy policy to sustain long run economic growth in Kazakhstan.

Suggested Citation

  • Khan, Saleheen & Jam, Farooq Ahmed & Shahbaz, Muhammad & Mamun, Md Al, 2018. "Electricity Consumption, Economic Growth and Trade Openness in Kazakhstan: Evidence from Cointegration and Causality," MPRA Paper 87977, University Library of Munich, Germany, revised 14 Jul 2018.
    • Handle: RePEc:pra:mprapa:87977
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    Cited by:

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    3. Khalid Eltayeb Elfaki & Nurul Anwar & Arintoko Arintoko, 2020. "Do Electricity Consumption and International Trade Openness Boost Economic Growth in Sudan? Empirical Analysis from Bounds Test to Cointegration Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 9-16.
    4. Nicholas M. Odhiambo, "undated". "Trade Openness And Energy Consumption In Sub-Saharan African Countries: A Multivariate Panel Granger Causality Test," Working Papers AESRI08, African Economic and Social Research Institute (AESRI).
    5. Kilinc-Ata, Nurcan & Proskuryakova, Liliana N., 2023. "Empirical analysis of the Russian power industry's transition to sustainability," Utilities Policy, Elsevier, vol. 82(C).
    6. Abbas Ali Chandio & Yuansheng Jiang & Jam Ghulam Murtaza Sahito & Fayyaz Ahmad, 2019. "Empirical Insights into the Long-Run Linkage between Households Energy Consumption and Economic Growth: Macro-Level Empirical Evidence from Pakistan," Sustainability, MDPI, vol. 11(22), pages 1-17, November.

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    Keywords

    Electricity; Economic growth; Kazakhstan; VECM;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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