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Investigating the Link Between Foreign direct investment, Energy consumption and Economic growth in Argentina

Nomahlubi Mavikela () and Hlalefang Khobai

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the relationship between energy consumption, foreign direct investment and economic growth in Argentina employing annual data covering the period from 1970 to 2016. To determine the long run relationship and the direction of causality among the variables, the Autoregressive Distributed Lag (ARDL) bounds testing approach and Vector Error Correction Model (VECM) technique are applied, respectively. The ARDL bounds tests suggested an existence of a long run relationship between energy consumption, foreign direct investments, economic growth and capital. More specifically, it was established that a 1% increase in foreign direct investments lead to a 0.013% increase in energy consumption, while a 1% increase in economic growth boots energy consumption by 0.35% in the long run. The VECM Granger-causality results suggested a unidirectional causality flowing from foreign direct investments and capital to energy consumption. A bidirectional causality flowing between energy consumption and economic growth was also established. This study brings a fresh perspective for the energy policy makers in Argentina

Keywords: Energy consumption, Foreign direct investment; Economic growth; ARDL (search for similar items in EconPapers)
JEL-codes: D60 F13 (search for similar items in EconPapers)
Date: 2018-01-18
New Economics Papers: this item is included in nep-ene and nep-int
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Working Paper: Investigating the Link between Foreign direct investment, Energy consumption and Economic growth in Argentina (2018) Downloads
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