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Electricity consumption and economic growth: A panel data approach to BRICS countries

Hlalefang Khobai

No 1707, Working Papers from Department of Economics, Nelson Mandela University

Abstract: This paper serves to investigate the causal relationship between electricity consumption and economic growth in the Brics countries during the period 1990 – 2014. Carbon dioxide emissions and urbanisation were included as additional variables to form a multivariate framework. The Kao panel co-integration and Johansen Fisher panel co-integration techniques are applied to analyse the co-integration relationship between the variables while the Vector Error Correction Model (VECM) Granger-causality test is used to estimate the causality relationship among the variables. The study’s results reveal that there is a long run relationship between the variables. The research outcome further detected a unidirectional causality flowing from economic growth to electricity consumption in the long run in Brics countries. So in the light of determination of the study, the policy implication is that a significant transformation of low carbon technologies such as renewable energy should be implemented to curb the emissions and sustain economic growth and development.

Keywords: Energy consumption; Economic growth; Causality; BRICS countries (search for similar items in EconPapers)
JEL-codes: D04 Q43 Z00 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2017-08, Revised 2017-08
New Economics Papers: this item is included in nep-cis, nep-ene and nep-reg
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