Economic development and the energy consumption nexus in developing countries: evidence from five South Asian countries

• Autorzy: Nisha Sabrina Akter , Ahmed Zobayer , Faruque Omar , Hasan Kamrul , Hossain Arafat

Identyfikatory

DOI

10.33223/epj/161487

Warianty tytułu

PL

Rozwój gospodarczy i związek zużycia energii w krajach rozwijających się: dowody z pięciu krajów Azji Południowej

• Języki publikacji: EN

Abstrakty

EN

This paper investigates the relationship between energy use and economic development in five South-Asian countries using national-level panel data from 1990 to 2014. Although many studies have already addressed the nexus between energy consumption and economic growth, there is a mixed finding. According to many researchers, South Asian countries have expanded energy consumption since the 1990s. Therefore, energy consumption as a variable for a specific period is considered for the countries of Bangladesh, India, Nepal, Pakistan and Sri Lanka. Furthermore, foreign direct investment (FDI) and international trade (IT) are also considered to be related variables in this study. Pooled ordinary least squares, random effects, and fixed effects estimation techniques are used to provide a reliable estimation, offsetting the country fixed effects. The fixed effect model is the most effective model that reveals the association between electricity usage and growth factors, as per the specification test and Hausman test. A statistically significant correlation was found between international trade, FDI, economic growth, and power usage. FDI has the highest impact on the rising power demand, followed by global commerce and per capita GDP (gross domestic product). More specifically, the study findings reveal that increased power consumption causes more investment, which results in increased economic growth in South Asian countries. The findings of the study further show that FDI significantly impacted upon power consumption and the area of SAARC’s energy demand, resulting in the entry of new technology and an increase in both economic growth and energy consumption. Future policies may focus on investment in the energy sector to promote economic development.

PL

W niniejszym artykule zbadano związek między zużyciem energii a rozwojem gospodarczym w pięciu krajach Azji Południowej na podstawie danych panelowych na poziomie krajowym w latach 1990–2014. Chociaż wiele badań dotyczyło już związku między zużyciem energii a wzrostem gospodarczym, wyniki są mieszane. Według wielu badaczy kraje Azji Południowej zwiększyły zużycie energii od lat 90. W związku z tym zużycie energii, jako zmienna dla określonego okresu, jest rozpatrywane dla krajów Bangladeszu, Indii, Nepalu, Pakistanu i Sri Lanki. Ponadto bezpośrednie inwestycje zagraniczne (BIZ) i handel międzynarodowy (IT) są również uważane za powiązane zmienne w tym badaniu. Aby zapewnić wiarygodne oszacowanie, kompensując efekty stałe kraju, stosuje się połączone techniki najmniejszych kwadratów, efekty losowe i efekty stałe. Model z efektem stałym jest najbardziej efektywnym modelem, który ujawnia związek między zużyciem energii elektrycznej a czynnikami wzrostu, zgodnie z testem specyfikacji i testem Hausmana. Stwierdzono statystycznie istotną korelację między handlem międzynarodowym, BIZ, wzrostem gospodarczym i zużyciem energii. Największy wpływ na rosnące zapotrzebowanie na energię mają BIZ, a następnie światowy handel i PKB per capita (produkt krajowy brutto). Dokładniej, wyniki badania pokazują, że zwiększone zużycie energii powoduje więcej inwestycji, co skutkuje zwiększonym wzrostem gospodarczym w krajach Azji Południowej. Wyniki badania pokazują ponadto, że BIZ znacząco wpłynęły na zużycie energii i obszar zapotrzebowania SAARC na energię, powodując wejście nowych technologii i wzrost zarówno wzrostu gospodarczego, jak i zużycia energii. Przyszłe polityki mogą koncentrować się na inwestycjach w sektorze energetycznym w celu wspierania rozwoju gospodarczego.

Słowa kluczowe

EN

electricity consumption; energy; GDP per capita; FDI; international trade; panel data; SAARC region

PL

zużycie energii elektrycznej; energia; PKB per capita; BIZ; handel międzynarodowy; dane panelowe; region SAARC

• Wydawca: Instytut Gospodarki Surowcami Mineralnymi i Energią PAN
• Czasopismo: Polityka Energetyczna
• Rocznik: 2023
• Tom: T. 26, z. 1
• Strony: 111--132
• Opis fizyczny: Bibliogr. 72 poz., tab.

Twórcy

autor

Nisha Sabrina Akter

• Department of Economics & Banking, International Islamic University Chittagong, Bangladesh

• https://orcid.org/0000-0002-5772-139X

autor

Ahmed Zobayer

• Department of Economics & Banking, International Islamic University Chittagong, Bangladesh

• https://orcid.org/0000-0002-3168-6055

autor

Faruque Omar

• Department of Economics, Stamford University Bangladesh, Bangladesh

• https://orcid.org/0000-0002-5142-9259

autor

Hasan Kamrul

• Department of Economics & Banking, International Islamic University Chittagong, Bangladesh

• https://orcid.org/0000-0001-5604-4588

autor

Hossain Arafat

• Department of Economics & Banking, International Islamic University Chittagong, Bangladesh

• https://orcid.org/0000-0001-8272-1220

Bibliografia

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• Ahamed, M.A. 2014. Nuclear power as a tool for sustainable development in energy sector in Bangladesh. [In:] 1st International Conference on Electrical Engineering and Information and Communication Technology, ICEEICT 2014.
• Alam et al. 2015 – Alam, A., Malik, I.A., Abdullah, A.B., Hassan, A., Faridullah, Awan, U., ... and Naseem, I. 2015. Does financial development contribute to SAARC ׳S energy demand? From energy crisis to energy reforms. Renewable and Sustainable Energy Reviews 41, pp. 818–829, DOI: 10.1016/j.rser.2014.08.071.
• Alberini et al. 2011 – Alberini, A., Gans, W. and Velez-Lopez, D. 2011. Residential consumption of gas and electricity in the US: The role of prices and income. Energy Economics 33(5), pp. 870–881.
• Ara et al. 2015 – Ara, J., Ahasan, A., Ahmad, S. and Kamruzzaman, M. 2015. Poverty, Protection and Exclusion in Rural Bangladesh.
• Attinay, G. and Karagol, E. 2005. Electricity consumption and Economic Growth: Evidence from Turky. Energy Economics 27, pp. 849–856.
• Bäker, A. and Goodall, A.H. 2020. Feline followers and “umbrella carriers”: Department Chairs’ influence on faculty job satisfaction and quit intentions. Research Policy 49(4), DOI: 10.1016/j.respol.2020.103955.
• Bekhet, H.A. and Othman, N. 2011. Assessing the Elasticities of Electricity Consumption for rural and urban areas in Malaysia: A Non-linear approach. International Journal of Economics and Finance 3(1), pp. 208–217.
• Bento, J.P.C. and Moutinho, V. 2016. CO2 emissions, non-renewable and renewable electricity production, economic growth, and international trade in Italy. Renewable and Sustainable Energy Reviews 55, pp. 142–155.
• Bhatti et al. 2019 – Bhatti, M.A., Alshagawi, M., Zakariya, A. and Juhari, A.S. 2019. Do multicultural faculty members perform well in higher educational institutions? Examining the roles of psychological diversity climate, HRM practices and personality traits (Big Five). European Journal of Training and Development 43(1–2), pp. 166–187, DOI: 10.1108/EJTD-08-2018-0081.
• Bozkaya et al. 2022 – Bozkaya, Ş., Onifade, S.T., Duran, M.S. and Kaya, M.G. 2022. Does environmentally friendly energy consumption spur economic progress: empirical evidence from the Nordic countries? Environmental Science and Pollution Research 29(54), pp. 82600–82610, DOI: 10.1007/s11356-022-23452-4.
• BPDB 2020. Annual Report 2019–2020. Retrieved from Dhaka, Bangladesh. [Online] http://bd.bpdb.gov. bd/bpdb/resourcefile/annualreports/annualreport_1605772936_AnnualReport2019-20.pdf [Accessed: 2023-01-06].
• Chandran et al. 2010 – Chandran, V., Sharma, S. and Madhavan, K. 2010. Electricity consumption–growth nexus: the case of Malaysia. Energy Policy 38(1), pp. 606–612.
• Cheng-Lang et al. 2010 – Cheng-Lang, Y., Lin, H.-P. and Chang, C.-H. 2010. Linear and nonlinear causality between sectoral electricity consumption and economic growth: Evidence from Taiwan. Energy Policy 38(11), pp. 6570–6573.
• Garg et al. 2015 – Garg, A., Naswa, P. and Shukla, P.R. 2015. Energy infrastructure in India: Profile and risks under climate change. Energy Policy 81, pp. 226–238, DOI: 10.1016/j.enpol.2014.12.007.
• Ghosh, S. 2002. Electricity consumption anAbabneh, K.I. 2020. Effects of met expectations, trust, job satisfaction, and commitment on faculty turnover intentions in the United Arab Emirates (UAE). International Journal of Human Resource Management 31(2), pp. 303–334, DOI: 10.1080/09585192.2016.1255904.
• Ahamed, M.A. 2014. Nuclear power as a tool for sustainable development in energy sector in Bangladesh. [In:] 1st International Conference on Electrical Engineering and Information and Communication Technology, ICEEICT 2014.
• Alam et al. 2015 – Alam, A., Malik, I.A., Abdullah, A.B., Hassan, A., Faridullah, Awan, U., ... and Naseem, I. 2015. Does financial development contribute to SAARC ׳S energy demand? From energy crisis to energy reforms. Renewable and Sustainable Energy Reviews 41, pp. 818–829, DOI: 10.1016/j.rser.2014.08.071.
• Alberini et al. 2011 – Alberini, A., Gans, W. and Velez-Lopez, D. 2011. Residential consumption of gas and electricity in the US: The role of prices and income. Energy Economics 33(5), pp. 870–881.
• Ara et al. 2015 – Ara, J., Ahasan, A., Ahmad, S. and Kamruzzaman, M. 2015. Poverty, Protection and Exclusion in Rural Bangladesh.
• Attinay, G. and Karagol, E. 2005. Electricity consumption and Economic Growth: Evidence from Turky. Energy Economics 27, pp. 849–856.
• Bäker, A. and Goodall, A.H. 2020. Feline followers and “umbrella carriers”: Department Chairs’ influence on faculty job satisfaction and quit intentions. Research Policy 49(4), DOI: 10.1016/j.respol.2020.103955.
• Bekhet, H.A. and Othman, N. 2011. Assessing the Elasticities of Electricity Consumption for rural and urban areas in Malaysia: A Non-linear approach. International Journal of Economics and Finance 3(1), pp. 208–217.
• Bento, J.P.C. and Moutinho, V. 2016. CO2 emissions, non-renewable and renewable electricity production, economic growth, and international trade in Italy. Renewable and Sustainable Energy Reviews 55, pp. 142–155.
• Bhatti et al. 2019 – Bhatti, M.A., Alshagawi, M., Zakariya, A. and Juhari, A.S. 2019. Do multicultural faculty members perform well in higher educational institutions? Examining the roles of psychological diversity climate, HRM practices and personality traits (Big Five). European Journal of Training and Development 43(1–2), pp. 166–187, DOI: 10.1108/EJTD-08-2018-0081.
• Bozkaya et al. 2022 – Bozkaya, Ş., Onifade, S.T., Duran, M.S. and Kaya, M.G. 2022. Does environmentally friendly energy consumption spur economic progress: empirical evidence from the Nordic countries? Environmental Science and Pollution Research 29(54), pp. 82600–82610, DOI: 10.1007/s11356-022-23452-4.
• BPDB 2020. Annual Report 2019–2020. Retrieved from Dhaka, Bangladesh. [Online] http://bd.bpdb.gov.bd/bpdb/resourcefile/annualreports/annualreport_1605772936_AnnualReport2019-20.pdf [Accessed: 2023-01-06].
• Chandran et al. 2010 – Chandran, V., Sharma, S. and Madhavan, K. 2010. Electricity consumption-growth nexus: the case of Malaysia. Energy Policy 38(1), pp. 606–612.
• Cheng-Lang et al. 2010 – Cheng-Lang, Y., Lin, H.-P. and Chang, C.-H. 2010. Linear and nonlinear causality between sectoral electricity consumption and economic growth: Evidence from Taiwan. Energy Policy 38(11), pp. 6570–6573.
• Garg et al. 2015 – Garg, A., Naswa, P. and Shukla, P.R. 2015. Energy infrastructure in India: Profile and risks under climate change. Energy Policy 81, pp. 226–238, DOI: 10.1016/j.enpol.2014.12.007.
• Ghosh, S. 2002. Electricity consumption and economic growth in India. Energy Policy 30(2), pp. 125– 129.
• Ibrahiem, D.M. 2015. Renewable electricity consumption, foreign direct investment and economic growth in Egypt: An ARDL approach. Procedia Economics and Finance 30, pp. 313–323.
• Jha, S. 2021. Understanding mindfulness outcomes: a moderated mediation analysis of high-performance work systems. Humanities and Social Sciences Communications 8(1), DOI: 10.1057/s41599-021-00708-x.
• Jumbe, C.B. 2004. Cointegration and causality between electricity consumption and GDP: empirical evidence from Malawi. Energy Economics 26(1), pp. 61–68.
• Kalyoncu et al. 2013 – Kalyoncu, H., Gürsoy, F. and Göcen, H. 2013. Causality relationship between GDP and energy consumption in Georgia, Azerbaijan and Armenia. International Journal of Energy Economics and Policy 3(1), pp. 111–117.
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• Mozumder, P. and Marathe, A. 2007. Causality relationship between electricity consumption and GDP in Bangladesh. Energy Policy 35(1), pp. 395–402, DOI: 10.1016/j.enpol.2005.11.033.
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• Pesaran et al. 2001 – Pesaran, M.H., Shin, Y. and Smith, R.J. 2001. Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics 16(3), 289–326, DOI: 10.1002/jae.616.
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• Rafindadi, A.A. and Ozturk, I. 2016. Effects of financial development, economic growth and trade on electricity consumption: Evidence from post-Fukushima Japan. Renewable and sustainable energy reviews 54, pp. 1073–1084, DOI: 10.1016/j.rser.2015.10.023.
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• Siddika, R. and Ahmad, S. 2022. Trade Liberalization and Economic Growth: A Cross-Country Study using Updated Sachs-Warner Index. Asian Journal of Economic Modelling 10(3), pp. 216–225, DOI: 10.55493/5009.v10i3.4581.
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• Wolde-Rufael, Y. 2006. Electricity consumption and economic growth: a time series experience for 17 African countries. Energy Policy 34(10), pp. 1106–1114, DOI: 10.1016/j.enpol.2004.10.008.
• Yıldırım Durmuş et al. 2019 – Yıldırım Durmuş, Ç., Yıldırım, S. and Demirtas, I. 2019. Investigating energy consumption and economic growth for BRICS-T countries. World Journal of Science, Technology and Sustainable Development 16(4), pp. 184–195, DOI: 10.1108/WJSTSD-12-2018-0063.
• d economic growth in India. Energy Policy 30(2), pp. 125– 129.
• Ibrahiem, D.M. 2015. Renewable electricity consumption, foreign direct investment and economic growth in Egypt: An ARDL approach. Procedia Economics and Finance 30, pp. 313–323.
• Jha, S. 2021. Understanding mindfulness outcomes: a moderated mediation analysis of high-performance work systems. Humanities and Social Sciences Communications 8(1), DOI: 10.1057/s41599-021-00708-x.
• Jumbe, C.B. 2004. Cointegration and causality between electricity consumption and GDP: empirical evidence from Malawi. Energy Economics 26(1), pp. 61–68.
• Kalyoncu et al. 2013 – Kalyoncu, H., Gürsoy, F. and Göcen, H. 2013. Causality relationship between GDP and energy consumption in Georgia, Azerbaijan and Armenia. International Journal of Energy Economics and Policy 3(1), pp. 111–117.
• Katırcıoğlu et al. 2016 – Katırcıoğlu, S., Fethi, S., Kalmaz, D.B. and Çağlar, D. 2016. Interactions between energy consumption, international trade, and real income in Canada: an empirical investigation from a new version of the Solow growth model. International journal of green energy 13(10), pp. 1059–1074.
• Kennedy, P. 2008. A guide to econometrics: John Wiley & Sons.
• Khan et al. 2014 – Khan, M.A., Khan, M.Z., Zaman, K., Irfan, D. and Khatab, H. 2014. RETRACTED: Questing the three key growth determinants: Energy consumption, foreign direct investment and financial development in South Asia.
• Mozahid et al. 2022 – Mozahid, N., Akter, S. and Hafiz Iqbal, M. 2022. Causality analysis of CO2 emissions, foreign direct investment, gross domestic product, and energy consumption: empirical evidence from South Asian Association for Regional Cooperation (SAARC) countries. Environmental Science and Pollution Research 29, pp. 65684–65698, DOI: 10.1007/s11356-022-20362-3.
• Mozumder, P. and Marathe, A. 2007. Causality relationship between electricity consumption and GDP in Bangladesh. Energy Policy 35(1), pp. 395–402, DOI: 10.1016/j.enpol.2005.11.033.
• Mudakkar et al. 2013 – Mudakkar, S.R., Zaman, K., Shakir, H., Arif, M., Naseem, I. and Naz, L. 2013. Determinants of energy consumption function in SAARC countries: Balancing the odds. Renewable and Sustainable Energy Reviews 28, pp. 566–574, DOI: 10.1016/j.rser.2013.08.006.
• Pesaran et al. 2001 – Pesaran, M.H., Shin, Y. and Smith, R.J. 2001. Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics 16(3), 289–326, DOI: 10.1002/jae.616.
• Rabab Mudakkar et al. 2013 – Rabab Mudakkar, S., Zaman, K., Shakir, H., Arif, M., Naseem, I. and Naz, L. 2013. Determinants of energy consumption function in SAARC countries: Balancing the odds. Renewable and Sustainable Energy Reviews 28, pp. 566–574, DOI: 10.1016/j.rser.2013.08.006.
• Rafindadi, A.A. and Ozturk, I. 2016. Effects of financial development, economic growth and trade on electricity consumption: Evidence from post-Fukushima Japan. Renewable and sustainable energy reviews 54, pp. 1073–1084, DOI: 10.1016/j.rser.2015.10.023.
• Sacko, I. 2004. Analysis of the links between economic growth and energy consumption in Mali (Analyse des liens entre croissance économique et consommation d’énergie au Mali). CERFOD-FSJE, Université du Mali (in French).
• Saidi et al. 2017 – Saidi, K., Rahman, M.M. and Amamri, M. 2017. The causal nexus between economic growth and energy consumption: New evidence from global panel of 53 countries. Sustainable cities and society 33, pp. 45–56, DOI: 10.1016/j.scs.2017.05.013.
• Shahbaz et al. 2017 – Shahbaz, M., Sarwar, S., Chen, W. and Malik, M.N. 2017. Dynamics of electricity consumption, oil price and economic growth: Global perspective. Energy Policy 108, pp. 256–270, DOI: 10.1016/j.enpol.2017.06.006.
• Siddika, R. and Ahmad, S. 2022. Trade Liberalization and Economic Growth: A Cross-Country Study using Updated Sachs-Warner Index. Asian Journal of Economic Modelling 10(3), pp. 216–225, DOI: 10.55493/5009.v10i3.4581.
• WDI 2016. World development indicator. World Bank.
• Wolde-Rufael, Y. 2006. Electricity consumption and economic growth: a time series experience for 17 African countries. Energy Policy 34(10), pp. 1106–1114, DOI: 10.1016/j.enpol.2004.10.008.
• Yıldırım Durmuş et al. 2019 – Yıldırım Durmuş, Ç., Yıldırım, S. and Demirtas, I. 2019. Investigating energy consumption and economic growth for BRICS-T countries. World Journal of Science, Technology and Sustainable Development 16(4), pp. 184–195, DOI: 10.1108/WJSTSD-12-2018-0063.