Electricity Consumption and Economic Growth in D8 Countries: Bootstrap Panel Causality

This study aims to test whether there is any relationship between the electricity consumption and gross domestic product of D8 countries (Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkey) and in the period of 1971 and 2014. The relationships between variables are examined...

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Bibliographic Details
Published in:Journal of economic cooperation & development 2021-01, Vol.42 (2), p.1-30
Main Author: Canbay, Şerif
Format: Article
Language:English
Subjects:
Alternative energy sources
Bidirectionality
Causality
Consumption
Cooperation
Economic growth
Electricity
Energy consumption
Energy resources
Feedback
GDP
Gross Domestic Product
Hypotheses
Industrial Revolution
Literature reviews
Neutrality
Nuclear energy
Renewable resources
Stagflation
Variables
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Summary:This study aims to test whether there is any relationship between the electricity consumption and gross domestic product of D8 countries (Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkey) and in the period of 1971 and 2014. The relationships between variables are examined through the Bootstrap Panel Causality test. The most important reason for choosing this test is that it reveals individual causality relationships for each country and that there is no need for unit root and/or cointegration testing prior to it. According to the Bootstrap Panel Causality test results, there is a positive and unidirectional causality relationship from electricity consumption to economic growth (the growth hypothesis) in Iran and from economic growth to electricity consumption in Indonesia and Nigeria (the conservation hypothesis). For Egypt and Malaysia, a positive and bidirectional causality relationship (the feedback hypothesis) is determined between the variables, while no causality (the neutrality hypothesis) relationship is found between the variables in Bangladesh, Pakistan, and Turkey.
ISSN:1308-7800