Linear and Nonlinear Causality between Energy Consumption and Economic Growth: The Case of Mexico 1965–2014

Gómez, Mario; Ciarreta, Aitor; Zarraga, Ainhoa

doi:10.3390/en11040784

Cited by 21 publications

(22 citation statements)

References 45 publications

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“…Further research in this field would be of great help, with different methods such as Residual Augmented Least Squares Lagrange Multiplier (RALS-LM) suggested by [72] (see, Ref. [38] for example) as well as considering the non-linear aspects by investigating the cointegrating relationship with asymmetric techniques such as the non-linear ARDL in [73].…”

Section: Discussionmentioning

confidence: 99%

“…A structural break in the time series occurs due to some unique economic events [37]. From energy-financegrowth aspects, such events include the changes in economic conditions, changes in energy policy, and fluctuations in the price of energy [38], legislative or technical changes [39]; consequently, these can have a permanent effect on the pattern of the time series [40]. Hence, it is critical to identify structural breaks in the data to avoid model misspecification and coefficient bias and to ensure that tests for the non-stationarity of the data give the correct result [41]; ignoring such break when it is present can result in misinterpretation by reducing the ability to reject a false unit root null hypothesis [37].…”

Section: Introductionmentioning

confidence: 99%

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Energy–Finance–Growth Nexus in ASEAN-5 Countries: An ARDL Bounds Test Approach

et al. 2019

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This study examines the relationship between energy consumption, financial development and economic growth for ASEAN-5 countries, namely Malaysia, Indonesia, the Philippines, Singapore and Thailand, over the period from 1980 to 2017. Finance-growth and energy-growth relationships have been well researched; however, the energy-finance-growth nexus is an equally important but less explored area. Our Auto Regressive Distributed Lags (ARDL) bounds test for cointegration results suggests that the variables tend to move together in the long run for all countries, apart from Indonesia. Our study also considers the effect of a structural break due to financial crisis and confirms that the break does not affect the long-term relationship among the variables; in other words, the financial crisis does not affect the energy-finance-growth nexus. Hence, considering the consistency of energy consumption, the importance of the energy sector must not be undermined, and appropriate energy policies are instrumental in maintaining a well-managed financial sector for sustainable economic growth.Sustainability 2020, 12, 5 2 of 16 demand [15], while the importance of financial variables in investigatng the energy-growth nexus is well documented by [16]. Financial development indicates the actual level of financial resources available for production and channels these funds through banks and stock markets [17]; thus, this promotes economic growth by boosting investment via transparent transactions for productive ventures [15]. A higher level of economic development through raising the capacity of the production sector and attracting foreign investment requires a stable power supply, which necessitates support by the financial sector through channeling resources to the energy sector [18]. A well-developed financial market makes financial resources available to high-return projects; at the same time, this implies better accounting and reporting standards, which increases investors' confidence [19], and attracts Foreign Direct Investment(FDI) [7]; which in turnaffects energy consumption. Similarly, financial development increases energy consumption by enhancing liquidity through the allocation of assets to appropriate ventures [15]. Hence, financial development affects the growth of an economy, which may influence energy consumption [20], and consequently, can act as the missing link in the energy-growth nexus [5]. With the growth in the economy, more productive inputs are needed which are supported by activities such as capital accumulation and energy expenditure where the role of finance is undisputable [21].However, to date, the nature of the relationship remains inconclusive from the relatively small amount of prevailing literature. Some researchers have found a negative relationship between energy consumption and financial development [22], while others detect a positive relationship [13,23]. Similarly, the results of the cointegration and causality analysis-based studies are also inconclusive. Several studies reported bidirectional ...

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Energy–Finance–Growth Nexus in ASEAN-5 Countries: An ARDL Bounds Test Approach

et al. 2019

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“…The Brent blend crude oil price has been widely used in previous studies [7,22,23], and the GDP used in this study was GDP per capita (in current U.S. dollars). These proxies have been widely used in previous studies [24][25][26]. The descriptive values for skewness and kurtosis in Table 1 indicated that all of the parameters were not normal.…”

Section: Data and Variablesmentioning

confidence: 99%

Analysis of Structural Changes in Financial Datasets Using the Breakpoint Test and the Markov Switching Model

Phoong

Phoong³

2020

Symmetry

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The price movements of commodities are determined by changes in the expectations about future economic variables. Crude oil price is non-stationary, highly volatile, and unstructured in nature, which makes it very difficult to predict over short-to-medium time horizons. Some analysts have indicated that the difficulty in forecasting the crude oil price is due to the fact that economic models cannot consistently show evidence of a strong connection between commodities and economic fundamentals, and, as a result, regarded the idea that economic fundamentals help predict price values as random luck. This study aimed to overcome the limitations of the economic models through the detection of structural changes as well as breaks in the data, using a breakpoint test. The Markov switching model is used to address the price patterns that led to a different market state. The results show that there are several changes as well as breaks in the estimated model. Moreover, there is an asymmetric correlation between the crude oil price and the GDP.

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“…To a certain extent, this can reduce the waste of energy, so that the consumption of energy can be reduced relatively. Many studies showed that there is a close relationship between economic growth and energy consumption [43,44]. For example, Apergis' results revealed the presence of unidirectional causality from energy consumption to economic growth in the short-term, and bidirectional causality between energy consumption and economic growth in the long-term [43].…”

Section: Economic Level (Pgrp)mentioning

confidence: 99%

The Dynamic Effect of High-Tech Industries’ R&D Investment on Energy Consumption

2019

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High-tech industries are characterized by strong technology, low energy consumption, and low pollution. Among these high-tech industries, five sectors (pharmaceutical industry, aerospace industry, electronic and communication equipment industry, computer and office equipment industry, and medical equipment industry) are selected for our study; and R&D investment is an important support for the development of high-tech industries. How do research and development (R&D) investments affect energy consumption in high-tech industries? Are these effects all positive? What are the differences in the impacts for different types of high-tech sectors or in different regions? And why? To analyze these issues, state space mode is an appropriate method which presented a dynamic process, accurately estimating the parameters at each time nod. We used this model to analyze the impact of five high-tech sectors' research and development (R&D) investments on energy consumption in the four regions of China from 1998 to 2016. Some conclusions are drawn from the research: (1) Pharmaceutical industry has a negative influence on energy consumption in all regions. Compared with other types of high-tech industries, the pharmaceutical industry consumes a higher degree of energy. (2) In the east, middle, and northeast of China, a gap remains between scientific research and production due to the lack of high-tech personnel in the aerospace industry, which lead to a weak effects on energy consumption in these regions (3) For the electronic and communication equipment industry and computer and office equipment industry, the continuous inflow of funds and talent has led to greater competition pressure and excess production capacity in some developed areas. This accounts for the fact that the two industries' R&D investment is beneficial to the reduction of energy consumption in the western regions. (4) The densely populated eastern region has a large demand for health services, leading to an increased demand for medical equipment. That is why the R&D of medical equipment industry have significantly reduced the energy consumption in the east regions than in the other regions.

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Linear and Nonlinear Causality between Energy Consumption and Economic Growth: The Case of Mexico 1965–2014

Cited by 21 publications

References 45 publications

Energy–Finance–Growth Nexus in ASEAN-5 Countries: An ARDL Bounds Test Approach

Energy–Finance–Growth Nexus in ASEAN-5 Countries: An ARDL Bounds Test Approach

Analysis of Structural Changes in Financial Datasets Using the Breakpoint Test and the Markov Switching Model

The Dynamic Effect of High-Tech Industries’ R&D Investment on Energy Consumption

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