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Renewable and non-renewable energy consumption-economic growth nexus: New evidence from South Asia

Mohammad Mafizur Rahman and Eswaran Velayutham

Renewable Energy, 2020, vol. 147, issue P1, 399-408

Abstract: This study explores the relationship between renewable and non-renewable energy consumption and economic growth for a panel of five South Asian countries over the period of 1990–2014. To see the long-run co-integration between the variables, the study applies Pedroni (1999, 2004) and Kao (1999) tests. The long-run equilibrium relationship is determined using panel Fully Modified Ordinary Least Squares and panel Dynamic Ordinary Least Squares estimation techniques. Dumitrescue-Hurlin (2012) panel causality test is used to see the causal links between the variables. The study finds positive impacts of renewable and non-renewable energy consumption and fixed capital formation on economic growth. Ceteris paribus, a 1% increase in renewable energy consumption, non-renewable energy consumption and capital increased economic growth by 0.66%. 0.10% and 0.58%, respectively. It is also revealed that there is a unidirectional causality running from economic growth to renewable energy consumption. As per the obtained results, the conservation hypothesis is valid for the South Asian countries.

Keywords: Renewable energy; Non-renewable energy; Economic growth; South Asia; Panel data; Fully modified ordinary least squares (search for similar items in EconPapers)
JEL-codes: C23 O10 Q42 Q43 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.renene.2019.09.007

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