The relationship between energy consumption and GDP in emerging countries

Abstract

Purpose – This paper aims to investigate the relationship between gross domestic product (GDP) by sector and energy consumption by type in 16 emerging countries. Design/methodology/approach – The panel model was utilized taking the period 1980-2010. Findings – The results revealed that GDP by sector and energy consumption by type are cointegrated. Moreover, the Granger causality concluded a bi-directional causal relationship between oil, natural gas and renewable energy consumption and the value of the manufacturing, industrial and services sector. Furthermore, a bi-directional causal relationship was also found between coal consumption and the value of the services sector. Furthermore, a one-way causal relationship was found from oil consumption to the value of the agriculture sector, the value of the agriculture sector to coal consumption, and coal consumption to the value of the manufacturing and the industrial sectors. Practical implications – This study recommended that these countries should increase their renewable energy consumption to achieve their GDP growth. Originality/value – This study is different from the previous studies, as it disaggregated the GDP into four sectors, namely, agriculture, manufacturing, industrial and the services sector. In addition, this study will disaggregate energy consumption into oil consumption, gas consumption, coal consumption and electricity consumption.

Natural gas consumption and economic growth nexus: Is the 10th Malaysian plan attainable within the limits of its resource?

“…The impact of this development shows that solid fuels have a negative impact on real GDP. Al-Mulali and Mohammed [3] examined the relationship between GDP by sector and energy consumption by type in 16 emerging countries. The panel model was utilised taking the period 1980-2010.…”

Application of smooth transition regression (STR) model on the relationship between natural gas consumption and economic growth in Nigeria

“…They also found evidence of bidirectional causality between natural gas consumption and economic growth. Usama and Abdul Hakim (2015) investigated the relationship between GDP by sector and energy consumption by type in 16 emerging countries from 1980 to 2010 where the panel model was utilized. The variables used include GDP, the value of the manufacturing, the agriculture sector, the industrial and services sector, natural gas, oil, coal and renewable energy consumption.…”

Natural gas consumption and economic growth nexus: an investigation for France

“…Therefore, the inclusion of some other variables, such as capital, labor and trade (exports), in a multivariate framework will provide better and reliable results to analyze the relationship between economic growth and energy (natural gas) consumption. Therefore, some recent studies on Granger causality have started to examine this relationship between energy (gas consumption) and economic growth, including relevant variables such as capital, labor, employment, energy prices, exports, pollution emissions or urbanization, oil, natural gas and consumption of renewable energy ( Narayan and Smyth, 2009; Lean and Smyth, 2010a, 2010b; Sami and Makun, 2011; Lean and Smyth, 2014; Al-mulali and Mohammed, 2015). The current research will be a new addition to this effort in the case of France by incorporating natural gas, exports, capital and labor in the production function.…”