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Abstract

This study aims to investigate the causal relationship between electric consumption and economic growth in Southeast Sulawesi. Time series of electric consumption and per capita regional gross domestic product data in the period of 1985-2016 were used in this study. The causal relationship were examined using an autoregressive distributed lag model and Granger causality test. The tests revealed a strong positive causal relationship between electric consumption and economic growth of South East Sulawesi in the long-run. Each 1% increase in electric consumption would caused 0.31% increase in economic growth. In the short-run, however, weak relationship exists between electric consumption and economic growth. Hence, electric consumption contributes to economic growth of Southeast Sulawesi in the long-run and in the short-run.

The Link between Economic Growth, Electricity Consumption, and CO2 Emissions: Evidence from Indonesia

“…Therefore, it is assumed that in the short run, lnELEC will be adjusted by 4.5 percent of last year's deviation from equilibrium. This finding is in line with the results of studies conducted by Bah & Azam (2017); Khan et al (2020;) Rahim et al (2018); Salahuddin et al (2015); Soytas et al (2007); and Thaker et al (2019).…”

“…This finding supports the results of a study conducted by Al-Mulali & Che Sab (2018), Bildirici (2012), Chontanawat (2020), andRahman (2020). Conflicting findings from the results of a study by Bah &Azam (2017), andRahim et al (2018).…”