Investigating the relationship between electricity consumption and economic growth: Evidence from South Africa

Bah, Muhammad Maladoh; Azam, Muhammad

doi:10.1016/j.rser.2017.05.251

Cited by 98 publications

(57 citation statements)

References 23 publications

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“…The results of both linear and nonlinear causality tests on the original time series support the neutrality hypothesis, i.e., there is no any causal relationship between energy consumption and economic growth in China from 1953 to 2013. These findings are consistent with the studies of Soytas and Sari [ 13 ], Chen, Kuo [ 15 ], Yalta and Cakar [ 19 ] and Bah and Azam [ 35 ], but contradictory with other studies such as Wang, Wang [ 18 ], Zhang and Yang [ 20 ], Tang, Tan [ 33 ], Bloch, Rafiq [ 21 ] and Bildirici and Ozaksoy [ 36 ].…”

Section: Discussionsupporting

confidence: 87%

Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis

Tan

Goh

2018

PLoS ONE

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The energy-growth nexus has important policy implications for economic development. The results from many past studies that investigated the causality direction of this nexus can lead to misleading policy guidance. Using data on China from 1953 to 2013, this study shows that an application of causality test on the time series of energy consumption and national output has masked a lot of information. The Toda-Yamamoto test with bootstrapped critical values and the newly proposed non-linear causality test reveal no causal relationship. However, a further application of these tests using series in different time-frequency domain obtained from wavelet decomposition indicates that while energy consumption Granger causes economic growth in the short run, the reverse is true in the medium term. A bidirectional causal relationship is found for the long run. This approach has proven to be superior in unveiling information on the energy-growth nexus that are useful for policy planning over different time horizons.

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Section: Discussionsupporting

confidence: 87%

Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis

Tan

Goh

2018

PLoS ONE

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“…However, after allowing for the possibility of structural breaks, they found weak causality between energy consumption and economic growth. Sixth, Bah and Azam (2017) used the ARDL to validate the existence of cointegration between energy consumption and economic growth. They also employed the Toda Yamamoto Granger causality and found no causality between energy consumption and economic growth.…”

Section: Empirical Literature On South Africamentioning

confidence: 99%

“…It should be noted that recent empirical studies on the energy consumption-economic growth nexus in African countries have failed to reach a consensus as to the direction of causality. Most of these studies have used various econometrics approaches in their analysis (see Odhiambo, 2009Odhiambo, , 2010Odhiambo, , 2016Kebede et al, 2010;Al-Mulali and Sab, 2012;Omri, and Kahouli, 2014;Iyke, 2015;Shahbaz et al, 2017;Ranjbar et al, 2017;Kumar et al, 2015;Salahuddin et al, 2015;Hassom and Masih, 2017;Bah and Azam, 2017;Dlamini et al, 2015Dlamini et al, , 2016Menyah and Wolde-Rufael, 2010). Al-Mulali and Sab (2012) also found that, at the country level, feedback long-run positive relationship between the trade variables, energy consumption and CO 2 emission takes place generally when the share of trade in GDP is high and when the country's level of development is high.…”

Section: Introductionmentioning

confidence: 99%

The interaction of energy consumption and economic growth in South Africa: assessment from the bounds testing approach

Sunde

2018

IJSE

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Researchers concur that energy plays a very significant role in the economic growth and development of any country and that increasing access to modernized systems of energy is critical to unlocking enhanced economic and social development in any country. In the light of this, the current article has empirically examined the causal interactions between energy consumption and economic growth in South Africa for the period 1970 to 2015 using the ARDL-bounds testing method. The results show that all the variables were found to be integrated of order one. The empirical results obtained fully support a positive long-run cointegrating relationship between real economic growth and energy consumption in South Africa. The article used trade openness and financial development as control variables in the model. The research found that although there is unidirectional causality running from energy consumption to economic growth in the short-run, there is long-run bidirectional causality between the two variables as indicated by the coefficients of the error correction terms which were found to be negative and significant as predicted by theory. This means that reducing energy consumption adversely affect real economic growth in both the shortand the long-run; thus, South Africa should adopt a more vigorous energy policy.

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“…Some research has shown country-specific causality between energy consumption and economic growth and can provide insight for designing future energy policy. Bah and Azam (2017) investigated the causal relationship between electricity consumption, economic growth, financial development, and CO2 emissions for South Africa over the period 1971-2012, validating the existence of cointegration among the included variables [4]. Shahbaz and Lean (2012) showed a relationship between electricity consumption and economic growth in Pakistan, They found bi-directional Granger causality between electricity consumption and economic growth [5].…”

Section: Introductionmentioning

confidence: 97%

A Comparison of the Relationship Between Electricity Consumption and Gross Domestic Product According to Development Status of Countries

Akay¹,

Kahraman²,

Kılıç³

2020

nat

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Electricity is a requirement for the economic, social and cultural progress for all developed, developing and underdeveloped countries. This paper examines the relationships between electricity consumption and gross domestic product in 30 countries, using data for the period 1995-2014. These countries are classified according to their developmental status. Widely used tests for the panel unit root, heterogeneous panel cointegration, and panel-based error correction models were employed. The empirical results indicate that electricity consumption and economic growth appear to be cointegrated. The long-run and short-run relationships are estimated using suitable estimations. The results show that the developmental levels of countries differ in their impact on the relationship between electricity consumption and GDP.

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Investigating the relationship between electricity consumption and economic growth: Evidence from South Africa

Cited by 98 publications

References 23 publications

Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis

Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis

The interaction of energy consumption and economic growth in South Africa: assessment from the bounds testing approach

A Comparison of the Relationship Between Electricity Consumption and Gross Domestic Product According to Development Status of Countries

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