The Asymmetric Impact of Oil Price and Electricity Consumption on Economic Growth: Evidence from Nigeria

Longe Adedayo Emmanuel (), Adekoya Taiwo Matthew (), Soyemi Caleb Olugbenga (), Agbanuji David Adeiza () and Adekomi Idowu Jacob ()
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Longe Adedayo Emmanuel: Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, Nigeria
Adekoya Taiwo Matthew: Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, Nigeria
Soyemi Caleb Olugbenga: Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Nigeria
Agbanuji David Adeiza: Energy Economics, Management and Policy, Emerald Energy Institute, Uniport
Adekomi Idowu Jacob: Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Nigeria

Acta Universitatis Sapientiae, Economics and Business, 2021, vol. 9, issue 1, 50-70

Abstract: The study examines the asymmetric impact of oil price and electricity consumption on economic growth in Nigeria between 1981 and 2018 using the Non-Linear Autoregressive Distributed Lag (NARDL) model. Results reveal that falling and increasing oil prices as well as gross capital formation affect economic growth in Nigeria negatively and significantly in the short-run, while electricity consumption affects economic growth positively and significantly in the short-run. In the long-run, the impact on economic growth of negative changes in oil price is negative and insignificant, while positive changes in oil price have a positive but insignificant impact on economic growth. The impact on the economic growth of electricity consumption remains positive but insignificant while that of gross capital formation is positive and significant. The results suggest that both in the short and the long run positive changes in oil price have greater impact on the economic growth than negative oil price changes. Capital formation is a significant determinant of Nigerian economic growth both in the short and the long run.

Keywords: oil price; electricity consumption; economic growth; NARDL (search for similar items in EconPapers)
JEL-codes: C22 O40 Q31 Q43 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:auseab:v:9:y:2021:i:1:p:50-70:n:9

DOI: 10.2478/auseb-2021-0003

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