scholarly journals Cointegration and Causality Analysis of Dynamic Linkage between Industrial Energy Consumption and Economic Growth in Pakistan

2019 ◽  
Vol 11 (17) ◽  
pp. 4546 ◽  
Author(s):  
Chandio ◽  
Rauf ◽  
Jiang ◽  
Ozturk ◽  
Ahmad
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Electricity Consumption ◽  
Industrial Sector ◽  
Oil Consumption ◽  
Industrial Oil ◽  
Long Run ◽  
Industrial Energy ◽  
Short Run ◽  
Gas Consumption

Energy consumption is a crucial factor to promote industrial sector contribution in an economy for its economic progression. Indeed, Pakistan is an emerging country, but recently adjoining with a very severe deficit of electricity sources. Hence, the industry value added growth leading to economic progression is also fronting inevitable challenges to promote the industry growth. The main objective of the study is to investigate the linkages between industrial sector oil, gas and electricity consumption, and renewable energy consumption with economic development in Pakistan. The findings display evidence of cointegration and a long-run relationship between the consumption of industrial energy and economic growth in Pakistan. The results showed that industrial electricity consumption and industrial gas consumption have a positive and statistically significant impact on economic growth both in the long run and the short run in Pakistan. Industrial oil consumption negatively impacts economic growth in the long run, but positively and statistically significantly impacts economic growth in the short run in Pakistan. Moreover, indications through the vector error correction model (VECM) model confirmed bi-directional relationships of industrial sector oil consumption and economic growth in Pakistan. Furthermore, the uni-directional nexus instituted between economic growth to industrial electricity consumption, industrial gas consumption to industrial electricity consumption, and industrial oil consumption to industrial electricity consumption. The findings uncovered solid interconnections among the studied variables and suggested that the Pakistani government should build a robust policy to diminish the oil, gas, and fossil fuels consumption for electricity production, as a replacement to depend on solar, hydro, wind, and biomass energy sources in Pakistan. Consequently, the government should promote more gas concentrated projects, as these will alleviate the contests of gas dearth and provide it to the industry at cheap prices with ease.

scholarly journals A Historical and Econometric Analysis of Energy Consumption and Industrial Output in Pakistan (1990-2019)

2021 ◽  
Vol 2 (2) ◽  
pp. 353-382
Author(s):  
Muhammad Umair ◽  
Muhammad Ramzan Sheikh ◽  
Kashif Saeed            
Keyword(s):  
Energy Consumption ◽  
Time Series Data ◽  
Trade Openness ◽  
Electricity Consumption ◽  
Series Data ◽  
Industrial Output ◽  
Oil Consumption ◽  
Industrial Growth ◽  
Long Run ◽  
Gas Consumption

This paper examines the nexus of disaggregated energy consumption and industrial output in Pakistan. The annual time series data over the period 1990-2019 has been taken for current research. ARDL technique has been employed for empirical analysis. The results show that oil consumption, electricity consumption and gas consumption are positively and significantly connected with the industrial output in long run. Similarly, trade openness, labour and capital also have the same association with the industrial output and have significant outcomes in the long run. The results of Granger causality show that there exists a unidirectional causality from electricity consumption to industrial output. The study concludes that oil, gas and electricity are contributing a large share in industrial growth so that it would be made an effort to install the plants relevant with these energy sources to meet the affordable demand in the industry sector.

scholarly journals Pengaruh Konsumsi Listrik dan Industrialisasi terhadap Pertumbuhan Ekonomi

2018 ◽  
Vol 26 (2) ◽  
pp. 93-103
Author(s):  
Pihri Buhaerah
Keyword(s):  
Economic Growth ◽  
Trading Volume ◽  
Electricity Consumption ◽  
Household Consumption ◽  
Industrial Sector ◽  
Regression Result ◽  
Explanatory Variables ◽  
Long Run ◽  
Short Run ◽  
Consumption Coefficient

AbstractThe structure of GDP nowadays is still dominated by households. As a result, economic growth stands at 5 percent. To boost economic growth performance, industrialization should be taken into account. In the process, energy availability particularly electricity becomes one of the main components. For this reason, the main purpose of this study is to measure the effect of electricity and industrialization on economic growth. To do so, this study employs ARDL model and uses secondary data with sample period from 1987 to 2016. Regression result analysis shows that electricity consumption, manufacturing, workers in the industrial sector, household consumption, and trading volume empirically significant both in the short-run and long-run. Interestingly, the value of the electricity consumption coefficient, the added value of processing industries, and the proportion of workers in the industrial sector are positive indicating that those variables contribute positively to economic growth. Meanwhile, the value of household consumption coefficient and trading volume is negative. This indicates that those variables contribute negatively to economic growth. Interestingly, among the five explanatory variables, electricity consumption is the strongest variable in boosting economic growth both in the short-run and the long-run. In addition, bounds cointegration test shows that all explanatory variables involved in this study have a long-term relationship with economic growth.  

scholarly journals The Effects of Energy Consumption and National Output on CO2 Emissions: New Evidence from OIC Countries Using a Panel ARDL Analysis

2020 ◽  
Vol 12 (8) ◽  
pp. 3312 ◽  
Author(s):  
Mohd Shahidan Shaari ◽  
Zulkefly Abdul Karim ◽  
Noorazeela Zainol Abidin
Keyword(s):  
Renewable Energy ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Oil And Gas ◽  
Oil Consumption ◽  
Panel Ardl ◽  
Long Run ◽  
Short Run ◽  
National Output ◽  
Gas Consumption

The issue of energy has been debated among policymakers and economists. Energy plays an important role in generating economic activities. On the other hand, it can have deleterious impacts on the environment as more carbon dioxide (CO2) emissions will be released. Most previous studies focused on total energy rather than types of energy such as oil and gas in investigating the effects of energy consumption on CO2 emissions. Therefore, this study investigates the effects of oil and gas consumption rather than total energy consumption on CO2 emissions in 20 Organization of Islamic Cooperation (OIC) countries. The dynamic heterogeneous panel (panel autoregressive distributed lag model – panel ARDL) approach namely pooled mean group (PMG), mean group (MG), and dynamic fixed effect (DFE) were employed. The main results reveal that in the long run, overall national output contributes to higher environmental degradation. However, in the short run, overall national output does not affect CO2 emissions. The results also suggest that the population can reduce CO2 emissions in the short run but leaves no effect in the long run. Besides, gas consumption and oil consumption can have deleterious effects on the environment. The effect of oil consumption is greater than the effect of gas consumption on the environment. Therefore, it is important to consume more renewable energy such as solar, biodiesel, and hydro to replace non-renewable energy, particularly oil, in a bid to conserve the environment.

Electricity consumption and economic growth in ASEAN

2017 ◽  
Vol 5 (2) ◽  
pp. 16
Author(s):  
Ahmad Ghazali Ismail ◽  
Arlinah Abd Rashid ◽  
Azlina Hanif
Keyword(s):  
Economic Growth ◽  
Energy Use ◽  
Electricity Consumption ◽  
Panel Estimation ◽  
Real Gdp ◽  
Long Run ◽  
Bidirectional Relationship ◽  
Short Run ◽  
Using Data ◽  
The Relationship

The relationship and causality direction between electricity consumption and economic growth is an important issue in the fields of energy economics and policies towards energy use. Extensive literatures has discussed the issue, but the array of findings provides anything but consensus on either the existence of relations or direction of causality between the variables. This study extends research in this area by studying the long-run and causal relations between economic growth, electricity consumption, labour and capital based on the neo-classical one sector aggregate production technology mode using data of electricity consumption and real GDP for ASEAN from the year 1983 to 2012. The analysis is conducted using advanced panel estimation approaches and found no causality in the short run while in the long-run, the results indicate that there are bidirectional relationship among variables. This study provides supplementary evidences of relationship between electricity consumption and economic growth in ASEAN.

scholarly journals Economic Development, CO2 Emissions and Energy Use Nexus-Evidence from the Danube Region Countries

Energies ◽  
2021 ◽  
Vol 14 (11) ◽  
pp. 3165
Author(s):  
Eva Litavcová ◽  
Jana Chovancová
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Carbon Emissions ◽  
Bounds Testing ◽  
Mutual Cooperation ◽  
Long Run ◽  
Short Run ◽  
Danube Region ◽  
The Impact

The aim of this study is to examine the empirical cointegration, long-run and short-run dynamics and causal relationships between carbon emissions, energy consumption and economic growth in 14 Danube region countries over the period of 1990–2019. The autoregressive distributed lag (ARDL) bounds testing methodology was applied for each of the examined variables as a dependent variable. Limited by the length of the time series, we excluded two countries from the analysis and obtained valid results for the others for 26 of 36 ARDL models. The ARDL bounds reliably confirmed long-run cointegration between carbon emissions, energy consumption and economic growth in Austria, Czechia, Slovakia, and Slovenia. Economic growth and energy consumption have a significant impact on carbon emissions in the long-run in all of these four countries; in the short-run, the impact of economic growth is significant in Austria. Likewise, when examining cointegration between energy consumption, carbon emissions, and economic growth in the short-run, a significant contribution of CO2 emissions on energy consumptions for seven countries was found as a result of nine valid models. The results contribute to the information base essential for making responsible and informed decisions by policymakers and other stakeholders in individual countries. Moreover, they can serve as a platform for mutual cooperation and cohesion among countries in this region.

scholarly journals Is Energy a Requirement for, or a Consequence of Economic Growth in Mauritius?

2020 ◽  
Author(s):  
HArris Neeliah ◽  
Boopen SEETANAH
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Voluntary Contraction ◽  
Net Energy ◽  
Omitted Variables ◽  
Production Models ◽  
Long Run ◽  
Short Run ◽  
Growth Production ◽  
Dynamic Time

Abstract The non-reproducible nature of energy, coupled to its essentiality either as a direct or an intermediary input, makes it a crucial factor of production. We posit that it is, a complement to capital and labor and should be included in growth production models. Mauritius is a net energy importer, hence information about the nexus between energy consumption and economic growth is central to policy-making. This paper attempts to analyze this relationship for Mauritius within a multivariate framework over the period 1961 to 2019. The work adopts a dynamic time series framework (VECM approach) to account for dynamism, causality, endogeneity and omitted variables. Empirical results reveal long-run and short-run elasticities of energy consumption on economics growth of 0.33 and 0.17 respectively, thus giving credence to the thesis that energy is an important growth determinant in Mauritius. We also uncovered bi-directional causality between energy consumption and economic growth in both the long-run and the short-run. Therefore, unexpected and/ or voluntary contraction in either economic growth or energy consumption could result in a ‘feedback effect’ and dent either.JEL: Q4, O1

LPG consumption and economic growth, 1975-2016: evidence from Cameroon

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jean Gaston Tamba
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Liquefied Petroleum Gas ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Gas Consumption ◽  
The Government ◽  
Energy Efficiency Policies

Purpose This paper aims to examine the causal relationship between liquefied petroleum gas consumption and economic growth in Cameroon over the period from 1975 to 2016. Design/methodology/approach The methodology of this study is based on the unit root, cointegration and causality tests. Cointegration is performed with both Johansen and autoregressive distributed lag bounds approach, while causality is done with the Granger test based on the error correction model (ECM) and Toda-Yamamoto procedure. Findings The cointegration methods confirm the existence of a level relationship, whereas the causal tests of the ECM reveal the existence of a short-run unidirectional causal relationship ranging from liquefied petroleum gas (LPG) consumption to economic growth and a bidirectional causal relationship between long-term and high-causality variables. With the Toda-Yamamoto procedure, unidirectional causality is found to run from economic growth to liquefied petroleum gas consumption. Research limitations/implications These findings imply that an increase in liquefied petroleum gas consumption leads to an increase in economic growth. As a result, supporting energy efficiency policies that aim to reduce liquefied petroleum gas consumption is not an option for Cameroon. Given that LPG consumption shares are still low in Cameroon, the government ought, thus, to increase LPG subsidization, vulgarize and favor policies aimed at encouraging LPG consumption to increase LPG deposits nationwide. This would help increase LPG consumption and consequently could increase economic growth in Cameroon. Originality/value LPG is a fossil fuel and is the less GHG emitter and it is considered as a modern source of energy for cooking in Cameroon households. It scarcity calls on energy policymakers to question the influence LPG consumption could have on economic growth in the short- and long-run. Thus, this paper could contribute to solving the issue of deforestation in Cameroon, especially in the Sahel zone; through the substitution of firewood consumption by LPG consumption in households.

Does Temperature Contribute to Environment Degradation? Pakistani Experience Based on Nonlinear Bounds Testing Approach

2020 ◽  
pp. 097215092091665 ◽  
Author(s):  
Muhammad Saeed Meo ◽  
Solomon Prince Nathaniel ◽  
Muhammad Murtaza Khan ◽  
Qasim Ali Nisar ◽  
Tehreem Fatima
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emissions ◽  
Energy Use ◽  
Global Climate ◽  
Bounds Testing ◽  
Renewable Energy Consumption ◽  
Global Climate Changes ◽  
Long Run ◽  
Short Run

Many developing countries are acutely vulnerable to global climate changes. In Pakistan, carbon emissions are primarily contributed by the factor of energy production from oil, gas and coal. The objective of this study is to estimate the asymmetric impact of temperature, energy use, economic growth, water scarcity on CO2 emissions in Pakistan over their period of 1960–2016. Based on nonlinear bounds testing (NARDL) approach, it is confirmed that there is an asymmetric relationship between temperature and CO2 emission, while energy use, population growth and economic growth have a positive effect in the short run. In the long run, energy consumption and economic growth were found to increase emission, while a temperature decrease by 1 per cent leads to 5 per cent decrease in carbon emissions. Population and water availability also reduces emission in Pakistan. Further, the study also confirms the long-run relationship between the variables. The finding of the study noticeably supports the policy to increase renewable energy consumption.

scholarly journals SHORT-RUN AND LONG-RUN EFFECT OF OIL CONSUMPTION ON ECONOMIC GROWTH: ECM MODEL

2014 ◽  
Vol 6 (1) ◽  
pp. 38-49
Author(s):  
Sofyan Syahnur ◽  
Endra Endra ◽  
Said Muhammad
Keyword(s):  
Economic Growth ◽  
Oil Consumption ◽  
Long Run ◽  
Short Run

scholarly journals Electricity Consumption, Corruption and Economic Growth

2018 ◽  
Vol 6 (4) ◽  
pp. 193-214
Author(s):  
Busrat Abidemi Agbaje ◽  
Ekele Idachaba
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Electricity Consumption ◽  
Electricity Price ◽  
African Countries ◽  
Causality Test ◽  
Long Run ◽  
Integration Techniques ◽  
Short Run ◽  
Electricity Infrastructure

An important prerequisite for reducing poverty, sustainable development and achievement of the millennium development goal has to some extent been tied to access to electricity. However, the subject matter; 'electricity consumption causing economic growth' has seen conflicting results from the theoretical and empirical front, if indeed a relationship exist at all. The study tests, within a panel context the long-run relationship between electricity consumption and economic growth for 13 African Countries from 2006 to 2017 by employing recently developed panel co-integration techniques. Implementing a three stage approach made up of panel unit root, panel co-integration and Granger causality test to examine the causal relationship between electricity consumption, electricity price, corruption, employment and growth. The study provides empirical evidence that a bidirectional causal relationship between electricity consumption and economic growth exist in the short run, suggesting that lack of electricity could hamper economic growth as well as an investment in electricity infrastructure would in turn improve economic growth. Also reveals that corruption causes the level of electricity consumption and GDP in the short run. On the long-run front electricity consumption and electricity price granger causes GDP and GDP causes electricity consumption.

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