Energy–Growth Nexus in the MENA Region: A Dynamic Panel Threshold Estimation

Abstract

This study provides new evidence regarding the nonlinear relationship between energy consumption and economic growth in the Middle East and North Africa (MENA) region for the 1990–2014 period. The empirical estimation is conducted using a dynamic panel threshold model. We found one threshold in the relationship between energy consumption and economic growth and one threshold in the relationship between carbon dioxide (CO2) emissions and economic growth. The results indicate that energy consumption positively and significantly affects economic growth in the low energy consumption regime. In contrast, it has a negative and significant impact on economic growth in the high energy consumption regime. Moreover, CO2 emissions are positively and significantly related to economic growth in the low regime of CO2 emissions. Nevertheless, the relationship between CO2 emissions and economic growth in the high CO2 emissions regime is negative and significant. Therefore, policymakers should implement other effective energy policies, such as stricter regulations on CO2 emissions, increase energy efficiency, and replace fossil fuels with cleaner energy sources to avoid unnecessary CO2 emissions and combat global warming. Future studies should identify the root causes of failures and issues in real time for inflation and link the energy–growth nexus to achieving the 2030 Sustainable Development Goals (SDGs) Agenda, Goal 7: Affordable and Clean Energy.

Economic prosperity, asymmetric natural resource income, and ecological demands in resource-reliant economies

“…Thus, the nonlinear relationship was examined to ensure the robustness of this study's inferences, and the result is presented in Table 8. Undoubtedly, the asymmetric models' outcomes are robust to the linear model; affirming that asymmetry exists in the natural resources rents' effect on economic growth as prior suggested by Varangis et al, 2004;Addison et al, 2016;Erdogan et al, 2020;Ampofo et al, 2021;Tahar et al, 2021. Environmental quality is revealed in Table 8 to have a positive long-term effect on economic growth, which corroborates prior submission by Alabed et al (2021). Environmental variables affect economic growth through environmental policies.…”

“…In another study, Musah et al (2021) applied the AMG and CCEMG and inferred a bidirectional association between economic growth and environmental quality in North African countries. Alabed et al (2021) later employed a dynamic panel threshold model and concluded that ecological quality improved economic growth in MENA countries. Aziz et al (2021) used the PMG, DOLS, FE and pooled OLS to infer that strict environmental policies adversely impacted economic prosperity in the short term but are a blessing in the long term.…”

Is Bangladesh on the right path toward sustainable development? An empirical exploration of energy sources, economic growth, and CO2 discharges nexus

“…Later, the energy-growth research was extended by disaggregating energy consumption between non-renewable and renewable energy and examining their dynamic link with economic growth and CO2 emissions (Paramati et al, 2017). The energy-growth-environment nexus is also studied extensively in many countries over the past three decades (Qasim Alabed et al, 2021).…”

Energy Consumption as a Measure of Energy Efficiency and Emissions in the MENA Countries: Evidence from GMM-Based Quantile Regression Approach

“…Due to this, many nations have made efforts to reduce their carbon footprint by increasing their usage of green power. CO 2 emissions in MENA countries have been the subject of numerous research (Bargaoui, 2021;Cheikh and Ben Zaied, 2021;Qasim et al, 2021;Lei et al, 2022). However, several studies in the academic literature have isolated the most significant contributors to air pollution (CO 2 emissions).…”