Energy, human capital and economic growth in Asia Pacific countries — Evidence from a panel cointegration and causality analysis

Fang, Zheng; Chang, Youngho

doi:10.1016/j.eneco.2016.03.020

Cited by 168 publications

(76 citation statements)

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“…The first one includes those studies that examine the relationship between human capital and energy consumption, since the population is a factor that affects energy consumption [33]. The work of Fang and Chang [34] is the first one to analyze the role of human capital in the relationship of energy and income, in its study of 16 countries in the region of Asia and the Pacific, applying FMOLS (Fully Modified Least Squares), and they find that human capital produces a one-way energy consumption. Likewise, Shahbaz, Gozgor, and Hammoudeh [3], through the application of an Autoregressive Distributive Lag (ARDL), take this approach for the US economy, and find a long-term relationship in which a 1% increase in education reduces energy consumption by 0.1095%.…”

Section: Review Of Previous Literaturementioning

confidence: 99%

Economic and Spatial Determinants of Energy Consumption in the European Union

et al. 2019

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In recent decades, various policies have been implemented to reduce energy consumption, as well as a considerable increase in research that analyzes the determinants of energy consumption, both with a standard feature, mitigating environmental degradation. However, few studies investigate the economic and spatial determinants of energy consumption in the European Union (EU). Therefore, to cover the knowledge gap, based on the review of the existing literature, this document is designed to analyze the determinants and energy policy in energy consumption in the EU. For this reason, the objective of this research is to analyze the effect of human capital, the price of oil, and Kyoto Protocol policy on energy consumption. In addition, the effect of contiguity and spatial concentration on energy consumption is studied for 34 European countries, of which 26 belong to the EU, for the period 2000–2016. For this, data collected from the World Bank (2017) and the World Energy Statistical Review (2017) were used. The work methodology is based on the application of econometric techniques for panel data, and spatial econometrics, based on the application of a Spatial Durbin Model (SDM), through which the existence of “spillovers” was determined in the implementation of the energy policy. The results of the estimates show a negative effect of the price of oil and human capital concerning energy consumption, and the variable "Policy" reflects a reduction in the energy consumption of the EU countries in the period analyzed. Additionally, the space panel confirms that the behavior of a country's energy consumption depends on its past values and the level of consumption presented by its neighbors, corroborating the importance of territorial contiguity in the success of environmental policy in the case of the European Union.

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Section: Review Of Previous Literaturementioning

confidence: 99%

Economic and Spatial Determinants of Energy Consumption in the European Union

et al. 2019

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“…Fang and Chang () examined the causal relationship between energy consumption and economic growth in the Asia‐Pacific region. Controlling for the impact of human capital and the cross‐country dependence, their finding suggests that economic growth drives energy consumption in the Asia Pacific region but conclusions vary across countries.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Although numerous studies have investigated the relationship between energy and economic growth both at the aggregated and sectoral levels (Mielnik and Goldemberg, ; Ziramba, ; Kebede et al ., ; Bildirici et al ., ; Ben Amar, ; Bildirici and Bakirtas, ; Ilesanmi and Tewari, ) as well as between economic growth and aggregate capital investment (Oh and Lee, ; Perkins et al ., ; Adebola, ; Gill et al ., ; Yildirim and Aslan, ), little attention has given to the role of human capital as it is seldom discussed in most literature although it has been recognized as a vital contributor to economic growth for a long time (Fang and Chang, ). Also, none have studied the distinction between economic and social investment and their impact on economic growth as well as energy consumption.…”

Section: Introductionmentioning

confidence: 99%

Energy consumption, human capital investment and economic growth in South Africa: a vector error correction model analysis

Ilesanmi

Tewari

2017

OPEC Energy Review

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This paper investigates the dynamic causal relationship between energy consumption, human capital investment and economic growth in South Africa for the period 1960–2015 within the vector error correction model (VECM) framework. It was revealed that there is cointegration among the variables. The causality test result reveals that there exists a long‐run bi‐directional relationship between economic growth and energy consumption. While on the other hand, a long‐run unidirectional causal relationship was discovered running from economic growth and energy consumption to social and economic infrastructure investment. This justifies the government's massive investment in the energy sector which is aimed at meeting the increasing energy demand. However, the lack of feedback from social infrastructural investment may imply that the focus social infrastructure investment is not adequate to granger cause growth or due to high inequality and unemployment in the country which will require more investment attention for it to significantly affect growth. The government, therefore, should give priority to the provision of both social and economic infrastructure investment and implementation of policies that are aimed at human capital development through public empowerment so that they can support the economy instead of depending on the government.

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“…In Turkey from 1995 to 2013, Dogan et al (2016) found that agricultural electricity consumption caused the output for non-coastal regions, while bidirectional causality existed between these variables for the entire panel and coastal regions. Fang and Chang (2016) found that economic growth caused energy use in the Asia Pacific region (16 countries) from 1970 to 2011, but the relationship may have varied for individual countries. For China, Furuoka (2016) found unidirectional causality running from natural gas consumption to economic development from 1980 to 2012.…”

Section: Introductionmentioning

confidence: 99%

Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis

et al. 2017

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This paper investigates the asymmetric relationship between energy consumption and economic growth by incorporating financial development, capital and labour into a production function covering the Indian economy from 1960Q 1 -2015Q 4 . The nonlinear autoregressive distributed lag bounds testing approach is applied to examine the asymmetric cointegration between the variables. An asymmetric causality test is also employed to examine the causal association between the considered variables. The results indicate cointegration between the variables in the presence of asymmetries. The asymmetric causality results show that only negative shocks in energy consumption have impacts on economic growth. In the same vein, only negative shocks in financial development have impacts on economic growth. By contrast, symmetrically, capital formation causes economic growth. Finally, over the study period, a neutral effect exists between the labour force and economic growth in India. The implications of these results for growth policies in India are also discussed.Keywords: Financial Development, Energy, Growth, India, Asymmetries JEL classification: O13 Acknowledgements: We would like to thank the editor, Professor Richard Tol (University of Sussex, Brighton, UK), as well as the three anonymous reviewers, for their valuable comments and suggestions that helped us improve our paper significantly. We also thank the participants at the 7 th International Research Meeting in Business and Management (IPAG, Nice, France, 11-12 July 2016). We are also grateful to Jawad Kazmi for his technical assistance. The authors' are responsible for any remaining errors or shortcomings. IntroductionThis study uses quarterly data to investigate the relationship between energy consumption and economic growth in India over the 1960-2015 period. Financial development (measured by domestic credit to the private sector), 1 capital formation and labour force 2 are also included in the Cobb-Douglas production function. This study's main contribution to the existing literature on the energy-growth nexus concerns its examination of the potential asymmetric relationship between the variables. Taking this asymmetry into account is important because a positive or negative variation on one variable does not have the same impact on the other variable. The existence of an asymmetric relationship between two variables can be caused by numerous factors, one of which concerns the complexity of economic systems and the mechanisms that generate the variables under study. This complexity may induce various channels through which one variable affects another. In our case, the relationship between energy consumption and economic growth has been found to be very complex because previous studies have shown four possible impact channels: the growth, conservative, feedback and neutrality hypotheses. 3 On the one hand, the relationship between energy consumption and financial development can also be very complex because numerous impact channels can exist between them...

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Energy, human capital and economic growth in Asia Pacific countries — Evidence from a panel cointegration and causality analysis

Cited by 168 publications

References 59 publications

Economic and Spatial Determinants of Energy Consumption in the European Union

Economic and Spatial Determinants of Energy Consumption in the European Union

Energy consumption, human capital investment and economic growth in South Africa: a vector error correction model analysis

Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis

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