Energy Consumption and Economic Growth in South and Southeast Asian Countries: Evidence from a Dynamic Panel Data Approach (original) (raw)
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Energy Consumption and Economic Growth: A Panel Cointegration Analysis for Developing Countries
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The aim of this paper is to examine the long-run relationship between energy consumption and economic growth for 80 developing countries from 1990 to 2009. For this purpose, methods of panel unit root test, panel cointegration test and panel dynamic ordinary least squares (DOLS) are applied. These 80 countries are divided into three income groups, namely, upper middle income countries, lower middle income countries and low income countries. The empirical results reveal a long-run cointegrated relationship between energy consumption and economic growth for the whole panel of countries as well as for each group of countries. We find the strong relation running from energy consumption to economic growth for upper middle income countries and lower middle income countries, and a strong relation which runs from economic growth to energy consumption for low income countries. These findings clearly indicate that energy consumption had a positive and statistically significant impact on econo...
Social Science Research Network, 2015
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International Journal of Energy Economics and Policy, 2022
In this paper, the panel relationship between energy consumption (ECP) and economic growth Gross domestic product (GDP), is investigated for the thirty-one countries from 1971 to 2014. These countries are divided into two panels based on lower-middle-income and high-income-level economies. Traditional ADF unit root test is used to confirm the stationarity at first difference. Also, four panel unit root tests, namely LLC (2002), IPS (1997, 2003), Fisher test proposed by Maddala and Wu (1999), Hadri (2000) tests confirmed the stationarity of variables for both panels at first difference. Furthermore, the long-run relationship between ECP and GDP is explored by four advance panel cointegration techniques, i.e., Kao (1999), Pedroni (1999, 2004), Fisher (1999), and Westerlund (2007). Moreover, the pairwise panel causality test is used to identify the Granger causality between ECP and GDP. Lastly, the dynamic OLS estimator of Saikkonen (1991) and the fully modified OLS estimator of Phillips and Hansen (1990) is used to estimate the parameters of the cointegration relationship. According to the empirical results, ECP and GDP are cointegrated for both panels. Longrun Granger causality running from GDP to ECP for both income level economies is also revealed. The energy conservation policies can play a vital role in boosting economic growth, especially for lower-middle-income economies.
Energy Policy, 2010
This paper uses the panel data of energy consumption (EC) and economic growth (GDP) for 51 countries from 1971 to 2005. These countries are divided into three groups: low income group, lower middle income group and upper middle income group countries. Firstly, a relationship between energy consumption and economic growth is investigated by employing Pedroni (1999) panel cointegration method. Secondly, panel causality test is applied to investigate the way of causality between the energy consumption and economic growth. Finally, we test whether there is a strong or weak relationship between these variables by using Pedroni (2001) method. The empirical results of this study are as follows: i) Energy consumption and GDP are cointegrated for all three income group countries. ii) The panel causality test results reveal that there is long-run Granger causality running from GDP to EC for low income countries and there is bidirectional causality between EC and GDP for middle income countries. iii) The estimated cointegration factor, b, is not close to 1. In other words, no strong relation is found between energy consumption and economic growth for all income groups considered in this study. The findings of this study have important policy implications and it shows that this issue still deserves further attention in future research.
Journal of the Knowledge Economy, 2024
This study aimed to analyze the relationship between energy consumption (EC) and economic growth (EG). Mostly, the relationship between energy and economic growth has been analyzed in certain country groups, whereas in this study, three different country groups were considered and compared. To this end, countries were categorized into three different groups, such as low-income developing, emerging market, and middle-income, and advanced economies. Thus, it was revealed whether the results varied across country groups. Ten country samples from each country group and a total of 30 country samples were utilized. The data of both EG and EC obtained over the period 1990-2022 were utilized. A panel LM test was performed to analyze the relationship between variables. As a result of the test, although a cointegration relationship existed between EG and EC in low-income developing countries, no cointegration relationship was found in emerging markets, and middleincome, or advanced economies. Therefore, it was concluded that the relationship between EC and EG might have varied according to the development levels of the countries. In addition, empirical evidence confirmed that a unilateral causality from EG to EC was determined only in low-income developing countries. These empirical insights are of particular interest to policymakers as they help to build substantial economic policies to sustain economic development.
Review of Economics and Finance, 2017
This study examines the dynamic relationship between energy consumption and the three major sectoral outputs (agricultural, manufacturing and service) in thirteen South and Southeast Asian countries using a panel data framework for the period 1971¨C2012. It undertakes panel cointegration analysis to investigate the long-run relationship between the variables. Also, the panel vector error correction model (PVECM) and impulse response functions (IRFs) are employed to examine the short- and long-run direction of causality and the effect of responses between energy consumption and the three sectoral outputs. The empirical results reveal that the long-run equilibrium relationship between energy consumption and the three sectoral outputs is positive and statistically significant, indicating the existence of long-run co-movement among the variables. The short- and long-run causality results support the existence of bidirectional causality between energy consumption and the three sectoral o...
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Journal of Asian Scientific Research, 2015
Explain the relationship between energy consumption and economic growth can play a significant role in setting and adjustment of policies on energy sector. Given the close relationship between Energy consumption and economic growth in selected countries, determination of quality of the relationship between these two variables helps effectively to explain of policies of the energy sector. This paper studies the causality relationship between energy consumption and GDP in 7 Asian countries, using panel cointegration, and panel-based error correction models from annual data covering the period of 1980 to 2010. The results of this study show that there are significant and positive relationship between economic growth and energy consumption in these selected countries.
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In this paper, we propose a nonlinear cointegration test for heterogeneous panels where the alternative hypothesis is an exponential smooth transition (ESTAR) model. We apply our tests for investigating cointegration relationship between energy consumption and economic growth for the G7 countries covering the period 1977-2007. Moreover, we estimate a nonlinear Panel Vector Error Correction Model in order to analyze the direction of the causality between energy consumption and economic growth. By using nonlinear causality tests we analyze the causality relationships in low economic growth and high economic growth regimes. Furthermore, we deal with the cross section dependency problem in both nonlinear panel cointegration test and nonlinear Panel Vector Error Correction Model.