The Relationship Between Energy Consumption and Economic Growth: Panel Data Analysis by Country Groups

Okyay Uçan (), Ecem Turgut () and Ayberk Nuri Berkman ()
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Okyay Uçan: Nigde Omer Halisdemir University
Ecem Turgut: Nigde Omer Halisdemir University
Ayberk Nuri Berkman: Nigde Omer Halisdemir University

Journal of the Knowledge Economy, 2025, vol. 16, issue 2, No 44, 7207 pages

Abstract: Abstract This study aimed to analyze the relationship between energy consumption (EC) and economic growth (EG). Mostly, the relationship between energy and economic growth has been analyzed in certain country groups, whereas in this study, three different country groups were considered and compared. To this end, countries were categorized into three different groups, such as low-income developing, emerging market, and middle-income, and advanced economies. Thus, it was revealed whether the results varied across country groups. Ten country samples from each country group and a total of 30 country samples were utilized. The data of both EG and EC obtained over the period 1990–2022 were utilized. A panel LM test was performed to analyze the relationship between variables. As a result of the test, although a cointegration relationship existed between EG and EC in low-income developing countries, no cointegration relationship was found in emerging markets, and middle-income, or advanced economies. Therefore, it was concluded that the relationship between EC and EG might have varied according to the development levels of the countries. In addition, empirical evidence confirmed that a unilateral causality from EG to EC was determined only in low-income developing countries. These empirical insights are of particular interest to policymakers as they help to build substantial economic policies to sustain economic development.

Keywords: Energy consumption; Economic growth; Panel LM test; Dumitrescu-Hurlin causality test (search for similar items in EconPapers)
JEL-codes: C01 C33 O10 Q40 Q43 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-02137-y

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