The Nexus among Energy Consumption, Economic Growth and Trade Openness: Evidence from West Africa

Abstract

The West African region has experienced high economic development. With the increasing energy consumption and emissions, how to coordinate the relationship among energy consumption, trade opening, and economic growth, and how to develop a low-carbon development pattern are becoming the most important issues in West Africa. This paper uses the tri-variable Toda-Yamamoto model to investigate the dynamic interactions among energy consumption, economic growth, and trade in West Africa. The findings indicate that, first, the positive impact of energy consumption on economic growth in West Africa has shown a significant lag effect, and energy consumption has a strong trade-dependent relationship to economic promotion. Trade opening and economic growth in West Africa are mutually reinforcing in the long run. Next, the role of foreign trade in boosting economic growth is more significant in countries with lower levels of economic development. Finally, when replacing the energy consumption indicator with CO2 emissions, the results remain robust. Considering the regional development differences, grouping countries by GDP per capita reveals that there exists a bilateral causal relationship between energy consumption and trade openness in the higher economic development group. The impact of trade openness on economic growth is more remarkable in countries with lower levels of economic development in West Africa. The findings have important implications for policymakers in understanding the economic development pattern of West Africa. It is necessary for West African countries to develop an integrated energy and trade policy in order to maintain long-term sustainable economic growth.

Spatial Differences and Influential Factors of Urban Carbon Emissions in China under the Target of Carbon Neutrality

“…The expansion of economic scale increases the output of products, whereas the expansion of output may increase CEs at the same technological level. When economic growth reaches a certain stage, that is, after the turning point of the EKC, the expansion of the economic scale may lead to a reduction in CE changes in the technology level and production model [ 57 ].…”

The Influence of Economic Growth and Energy Consumption on Environmental Degradation in Pakistan

“…In contrast, the other variables are insignificant in the short run. In the long run, energy consumption and economic growth both significantly and positively impact CO2 emissions (Anwar & Elfaki, 2021;Muhammad, 2019;Qi et al, 2022;Wen et al, 2021). If energy consumption is increased by one percent it will increase CO2 emission by 0.0126 percent.…”

Energy Consumption Dynamics and Sustainable Growth in Nigeria

“…Most empirical literatures are dominated by conflicting evidences with respect to the nature of the relationship between energy consumption and growth. For instance, the recent work of [17], which investigated the dynamic interactions among energy consumption, economic growth, and trade in West Africa using the tri-variable Toda-Yamamoto model, has demonstrated that the positive impact of energy consumption on economic growth in West Africa showed a significant lag effect, and that energy consumption has a strong trade-dependent relationship to economic promotion, while trade opening and economic growth in West Africa were mutually reinforcing in the long run. [18] Documented that increased in crude oil price significantly led to a rise in energy consumption while Co2 emissions exert negatively on growth in Venezuela, after investigating oil price, energy consumption and carbon dioxide emissions using ARDL approach.…”