The relationship between energy consumption, urbanization, and economic growth in new emerging-market countries

• Published in: Energy (Oxford) 2018-03, Vol.147, p.110-121
• Main Authors: Bakirtas, Tahsin, Akpolat, Ahmet Gokce
• Format: Article
• Language: English
• Subjects: Bivariate analysis; Carrion-i Silvestre panel stationarity test; Causality; Dumitrescu-hurlin panel Granger causality test; Economic analysis; Economic development; Economic growth; Emerging markets; Energy consumption; Markets; Studies; Urbanization
• ISSN: 0360-5442; 1873-6785
• DOI: 10.1016/j.energy.2018.01.011

This study investigates the causal relationship between energy consumption, urbanization and economic growth using Dumitrescu-Hurlin panel Granger causality test for the period 1971–2014 in New Emerging-Market Countries (Colombia, India, Indonesia, Kenya, Malaysia, and Mexico). Bivariate and trivariate panel Granger causality analyses which detect joint causality effect from two series to another are applied. According to the bivariate analysis, there is panel Granger causality from economic growth to energy consumption, and from urbanization to energy consumption and economic growth. According to the trivariate analysis, there is panel Granger causality from energy consumption and urbanization to economic growth, from economic growth and urbanization to energy consumption, and from energy consumption and economic growth to urbanization. •The qualified panel stationarity and Granger causality tests are used.•Economic growth and urbanization are crucial factors determining energy consumption.•Energy procurement should be provided for sectors promoting economic growth.•Urbanization policies should promote sectors that facilitate economic growth.•Energy simulations should take urbanization into consideration.