The Hydroelectricity Consumption and Economic Growth Nexus: A Long Time Span Analysis

Abstract

The objective of this article analyzes the nexus between hydroelectricity consumption and economic growth in seven Latin American countries in the period from 1966 to 2015, using an auto-regressive distributive lag (ARDL) methodology. The results suggest the existence of feedback hypothesis in short-run, where the hydroelectricity consumption and economic growth are interrelated.Keywords: Nexus, Hydroelectricity consumption, Economic growth, Latin America, ARDL, Feedback hypothesis.

The Energy-Economic Growth Nexus in Latin American and Caribbean Countries: A New Approach with the Globalisation Index

“…The same author complements yet that the enormous abundance of renewable sources in the Latin America and the Caribbean region stimulate the investments in the renewable energy technologies and consequently causes a positive impact on economic growth and subsequently in the consumption of energy (KOENGKAN, 2017c). Moreover, the unidirectional causality from consumption of fossil to economic growth in the Latin American countries agrees with some authors (e.g., ACARAVCI and OZTURK, 2010;FUINHAS and MARQUES, 2011;KAIS and MBAREK, 2017;DESTEK and ASLAN, 2017;KOENGKAN, 2017d;FUINHAS et al, 2017;KOENGKAN and FUINHAS,2020a). As stated by KOENGKAN (2017d) that investigated the South American countries, the existence of unidirectional causality in the Latin American countries is due to the region's dependence on the consumption of energy to growth, where the increase of 1% in the energy use increases the economic growth in 0.5% respectively.…”

“…Moreover, the unidirectional causality from consumption of fossil to economic growth in the Latin American countries agrees with some authors (e.g., ACARAVCI and OZTURK, 2010;FUINHAS and MARQUES, 2011;KAIS and MBAREK, 2017;DESTEK and ASLAN, 2017;KOENGKAN, 2017d;FUINHAS et al, 2017;KOENGKAN and FUINHAS,2020a). As stated by KOENGKAN (2017d) that investigated the South American countries, the existence of unidirectional causality in the Latin American countries is due to the region's dependence on the consumption of energy to growth, where the increase of 1% in the energy use increases the economic growth in 0.5% respectively. This idea is accepted by FUINHAS et al ( 2017) that confirms that the Latin American countries have a high economic dependence on fossil fuels, where some countries of this region are major fossil fuel energy producers, and others are significant importers.…”

“…Considering this, the presence of a bidirectional relationship between consumption of renewable energy and economic growth is in line with several authors that studied this nexus (e.g., APERGIS and PAYNE, 2010;APERGIS et al, 2010;TUGCU et al, 2012;SEBRI and BEN-SALHA, 2014;KOENGKAN, 2017c;KOENGKAN, 2017d;MENEGAKI et al, 2017). According to KOENGKAN (2017e), the bidirectional relationship between economic growth and consumption of renewable energy is due to the countries of Latin America and the Caribbean region are very sensitive to changes in the economic activity, where a faster economic growth exerts a positive impact on energy use.…”

“…The nexus between economic growth and consumption of energy has been explored by several authors (e.g., ANG, 2007;ACARAVCI and OZTURK, 2010;APERGIS and PAYNE, 2010;APERGIS et al, 2010;CARAIANI et al, 2015;DESTEK and ASLAN, 2017;FUINHAS and MARQUES, 2011;FUINHAS et al, 2017;HATZIGEORGIOU et al, 2011;KAIS and MBAREK, 2017;KOENGKAN, 2017c;KOENGKAN, 2017d;LEE, 2006;MENEGAKI, 2011;MENEGAKI and OZTURK, 2013;MENEGAKI et al, 2017;NARAYAN and POPP, 2012;SEBRI and BEN-SALHA, 2014;TUGCU et al, 2012), while few authors have explored the relationship between consumption of energy and globaliation (e.g., SOYTAS et al, 2007;SHAHBAZ et al, 2013;KOENGKAN, 2017a;SHAHBAZ et al, 2017;YAZDI and SHAKOURI, 2017;WHEELER, 2000;RAHMAN and MIAH, 2017).…”

“…Moreover, there is another group of scholars that discovered the existence of bidirectional causality between economic and consumption of energy (e.g., APERGIS and PAYNE, 2010;APERGIS et al 2010;FUINHAS and MARQUES, 2011;TUGCU et al, 2012;SEBRI and BEN-SALHA, 2014;KOENGKAN, 2017c;KOENGKAN, 2017d;MENEGAKI et al, 2017). For example, APERGIS and PAYNE (2010) examined the nexus between consumption of renewable energy and economic growth for a panel data of twenty OECD countries over the period between 1985-2005.…”