An Econometric Investigation of Dynamic Linkages Between CO2 Emissions, Energy Consumption, and Economic Growth: A Case of India and China

2021 ◽  
pp. 227868212110022
Author(s):  
Rakesh Shahani ◽  
Aastha Bansal
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Structural Break ◽  
Energy And Environment ◽  
Speed Of Adjustment ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Per Capita ◽  
Growth Energy ◽  
India And China

The article investigates the co-integrating relationship between economic growth, energy, and environment for India and China for the period 1970–2014 (using log transformed yearly data). Whereas gross domestic product per capita is taken as the growth proxy, CO2 emissions per capita represents environmental degradation and fossil fuel consumption is the proxy for energy consumption. The methodology adapted is autoregressive distributed lag “F” Bounds test with single structural break. The results of the study showed that co-integrating relation was established among all the variables except when CO2 (China) is taken as dependent variable. The “error correction model” term was negative and significant in all the cases (except for CO2 China again). Further the speed of adjustment toward equilibrium was highest at 16% per annum (p.a.) for CO2 in India while it was between 3% and 8% p.a. for rest of the variables. Chow breakpoint test even confirmed that India CO2 emissions had a break in 1996.

Is Environment Degradation a Pre-condition to Economic Growth? A Case of India and China

2021 ◽  
pp. 097226292110340
Author(s):  
Rakesh Shahani ◽  
Nitin Khaneja
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Environmental Degradation ◽  
Forest Area ◽  
Land Area ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Integration Test ◽  
Per Capita ◽  
India And China

This study is an attempt to model the co-integrating relation between economic growth and environmental degradation for two countries namely India and China. Although CO2 emissions has been the proxy for environmental degradation for most research papers, the study also includes a supplementary proxy environment variable viz forest area as a percentage of land area reflecting the depleting green cover. Thus, the study includes gross domestic product (GDP) per capita as the dependent variable and two regressors as carbon dioxide emissions per capita and forest area as a percentage of land area. The study also includes two additional regressors as trade as a percentage of GDP (proxy for trade openness) and domestic credit to the private sector (proxy for financial development), all converted to natural log terms, and the relation between the variables has been tested using autoregressive distributed lag bounds co-integration approach. The results of the study showed that long-run ‘F’ bounds co-integration test of autoregressive distributed lag was accepted for India but was rejected in case of China. For India, temporal causality was also seen to flow from forest area to per capita GDP with negative cause–effect relation, which was confirmed by Toda and Yamamoto (1995, Journal of Econometrics, 66(1–2), 225–250) causality results. Further with respect to India with a significant co-integration results, vector error correction model was worked out and the results showed that error correction (ECM) coefficient (which was found to be negative and significant) showed that the process of movement towards equilibrium was unexpectedly slow at a rate less than 0.01% per period. The main contribution of the study was to include a new proxy ‘forest area’ for environmental degradation and to empirically prove that with the decrease in forest cover there was a rise in economic growth.

scholarly journals Does the Export-Led Growth Hypothesis Hold for Services Exports in Emerging Economies?

2021 ◽  
Vol 14 (27) ◽  
pp. 63-75
Author(s):  
Okpeku Lilian ONOSE ◽  
◽  
Osman Nuri ARAS ◽  
Keyword(s):  
Economic Growth ◽  
Emerging Economies ◽  
Emerging Countries ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
Positive Effect ◽  
Growth Hypothesis

The export-led growth hypothesis states a positive relationship between the growth of exports and long-run economic growth. This study examines the validity of the export-led growth hypothesis of services exports in 5 emerging economies, including Brazil, India, Nigeria, China, and South Africa (BINCS), for the period of 1980-2019. The study employs the panel mean group autoregressive distributed lag (ARDL) procedure to identify a causal relationship between services exports and gross domestic product (GDP) per capita. The findings show that the export-led growth hypothesis in services only has a positive effect on economic growth in the short run while other variables, including foreign direct investment (FDI), gross capital formation, and labour, increase economic growth in the long run. Hence, the emerging countries should focus more on internal investment to boost growth in the long and short run.

scholarly journals Renewable Energy and Economic Growth: Evidence from European Countries

2018 ◽  
Vol 10 (8) ◽  
pp. 2626 ◽  
Author(s):  
Stamatios Ntanos ◽  
Michalis Skordoulis ◽  
Grigorios Kyriakopoulos ◽  
Garyfallos Arabatzis ◽  
Miltiadis Chalikias ◽  
...  
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Renewable Energy Sources ◽  
European Countries ◽  
Energy Sources ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Fixed Capital Formation

This paper aims at examining the relationship between energy consumption deriving from renewable energy sources, and countries’ economic growth expressed as GDP per capita concerning 25 European countries. The used dataset involves European countries’ data for the period from 2007 to 2016. The statistical analysis is based on descriptive statistics, cluster analysis, and autoregressive distributed lag (ARDL), and reveals that all variables are related; this suggests a correlation between the dependent variable of GDP and the independents of renewable energy sources (RES) and Non-RES energy consumption, gross fixed capital formation, and labor force in the long-run. Furthermore, the results show that there is a higher correlation between RES’ consumption and the economic growth of countries of higher GDP than with those of lower GDP. The obtained results are consistent with other papers reviewed in this study.

scholarly journals Petroleum Consumption and Financial Development in Malaysia

2016 ◽  
Author(s):  
Jen-Eem Chen ◽  
Yan-Ling Tan ◽  
Chin-Yu Lee ◽  
Lim-Thye Goh
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Financial Sector ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run

This paper aims to contribute to the existing literature by examining the dynamic relationship among petroleum consumption, financial development, economic growth and energy price. The sample of this study is based on the Malaysian annual data from 1980 to 2010. The model specification was examined in the Autoregressive Distributed Lag (ARDL) framework and the results revealed the existence of a long-run equilibrium. The findings indicated that financial development and economic growth cause a demand for energy to escalate in the long run. The Toda-Yamamoto (TYDL) non Granger-causality test provides evidence that there is unidirectional Granger-causality running from financial development and economic growth to energy consumption in the long run. This suggests that Malaysia is not an energy-dependent country. Hence, the government could implement energy conservation policies to reduce the waste of energy use. Given that development in the financial sector, and economic growth increase petroleum consumption in Malaysia, the policies pertaining to energy consumption should incorporate the development of the financial sector and economic growth of country.   Keywords: Petroleum consumption, financial development, non-renewable energy, Autoregressive Distributed Lag (ARDL), Toda-Yamamoto (TYDL) non Granger-causality test

scholarly journals The Effect of Renewable Energy Consumption on Economic Growth in Croatia

2021 ◽  
Vol 24 (1) ◽  
pp. 113-126
Author(s):  
Sonia Pearson
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Renewable Energy Consumption ◽  
Energy Investment ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Renewable Energy Investment ◽  
The Empirical Analysis

Abstract This paper investigates the effect of renewable energy on economic growth in Croatia for the period 1996-2018. The Autoregressive Distributed Lag (ARDL) technique is used to find the long run relationships between renewable energy, energy consumption and economic growth. The empirical analysis indicates that renewable energy has a positive and significant effect on economic growth in the short and long run. These findings indicate that the Croatian government can continue to boost renewable energy investment without impeding economic growth.

CO2emissions and militarization in G7 countries: panel cointegration and trivariate causality approaches

2017 ◽  
Vol 22 (6) ◽  
pp. 771-791 ◽  
Author(s):  
Melike Bildirici
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Panel Cointegration ◽  
Energy Policies ◽  
G7 Countries ◽  
Causality Test ◽  
Per Capita Gdp ◽  
Distributed Lag ◽  
Short Run ◽  
Per Capita

AbstractThis paper aims to test the relation among militarization, CO2emissions, economic growth and energy consumption in G7 countries from 1985 to 2015 via panel methods. Long- and short-run coefficients and the causal relationship between the variables are important for G7 countries' energy policies and strategy. Cointegration among CO2emissions, militarization, energy consumption and economic growth was determined by using panel Johansen and panel autoregressive distributed lag (PARDL) methods. Further, the panel trivariate causality test was applied and unidirectional causalities from militarization to CO2emissions and from energy consumption to CO2emissions were found. The evidence of bidirectional causality between per capita GDP and militarization, between per capita GDP and energy consumption, and between energy consumption and militarization was determined. The paper recommends that environmental and energy policies must recognize the differences in the relation between militarization, energy consumption and economic growth in order to maintain sustainable economic growth in the G7 countries.

scholarly journals The Nexus between Energy Consumption, Biodiversity, and Economic Growth in Lancang-Mekong Cooperation (LMC): Evidence from Cointegration and Granger Causality Tests

2019 ◽  
Vol 16 (18) ◽  
pp. 3269 ◽  
Author(s):  
Liu ◽  
Liang
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Fossil Fuels ◽  
Policy Implications ◽  
Indochina Peninsula ◽  
Dominant Position ◽  
Fossil Energy ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Causality Tests

This work is proposed to examine the relationships between energy consumption, biodiversity, and economic growth for China and five countries in the Indochina Peninsula, which are Cambodia, Laos, Myanmar, Thailand, and Vietnam, who also belong to Lancang-Mekong Cooperation, for the time span from 1991 to 2014. For this purpose, this work adopted autoregressive distributed lag (ARDL) through a dynamic simulation process. The estimation outcomes indicate that the nexus of the economic growth and energy consumption are diversified in fossil energy consumption and renewable consumption, respectively. The results are consistent with the fact that renewable energy is an alternative to fossil fuels, and traditional energy is still in the dominant position. This work is expected to serve as a first-hand examination on Lancang-Mekong Cooperation by adding innovative perspectives into existing research. Meanwhile, policy implications will also be discussed in this work.

Causal dynamics between renewable energy consumption and economic growth in South Korea: Empirical analysis and policy implications

2018 ◽  
Vol 29 (7) ◽  
pp. 1298-1315 ◽  
Author(s):  
Seong-Hoon Lee ◽  
Yonghun Jung
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
South Korea ◽  
Policy Implications ◽  
Renewable Energy Consumption ◽  
Vector Error Correction ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Causality Tests

This paper examines the causal relationship between renewable energy consumption and economic growth in South Korea using a framework of the conventional neo-classical production function of capital, labor, and renewable energy. We use cointegration technique of the autoregressive distributed lag bounds test and vector error correction mechanism causality tests to determine the econometric relationship, using data for the period 1990–2012; the results support the conservation hypothesis for South Korea. The results of the autoregressive distributed lag bounds test show that renewable energy consumption has a negative effect on economic growth, and the results of a vector error correction mechanism causality tests indicate a unidirectional relationship from economic growth to renewable energy consumption. The empirical results imply that economic growth is a direct driver expanding renewable energy use. In terms of policy implications, it is best for policy makers to focus on overall economic growth rather than expanding renewable energy to drive economic growth.

scholarly journals Population growth, income growth and savings in Ghana

2020 ◽  
Vol 22 (2) ◽  
pp. 281-296
Author(s):  
John Gartchie Gatsi ◽  
Michael Owusu Appiah
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Population Growth ◽  
Positive Impact ◽  
Policy Formulation ◽  
Content Type ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Efficient Access ◽  
The Relationship

PurposeThe study explores the relationship among economic growth, population growth, gross savings and energy consumption over the period 1987– 2017.Design/methodology/approachThe autoregressive distributed lag (ARDL) bounds test approach by Pesaran et al. (2001) was employed to investigate variables for the study.FindingsIn the key findings, both gross savings and population growth negatively affect economic growth. However, energy consumption has positive impact on economic growth.Practical implicationsThese findings call for policy portfolios to address the impacts of gross savings and population growth on economic development. In particular, the financial sector needs to be revamped to be more efficient in channeling funds from the surplus units to the deficit units. It is recommended that investment be made in financial and technological innovation to provide efficient access to credits and other financial products even though individual savings may not move with economic growth.Originality/valueMany studies have explored the nexus between savings and economic growth without considering population growth and energy consumption. In this study, the relationship among savings, economic growth, population growth and energy consumption provide additional knowledge in policy formulation.

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