Electricity Consumption and Economic Growth Nexus: Evidence from Maki Cointegration

  • Festus Victor Bekun Eastern Mediterranean University Economics department Famagusta Via Mersin 10 Turkey
  • Mary Oluwatoyin Agboola Finance and Banking Department, College of Business Dar Al Uloom University, 1 Mizan St., Al Falah, Riyadh 13314 Saudi Arabia
Keywords: Electricity consumption, economic growth, Maki Cointegration, Dynamic causality, Nigeria.

Abstract

Access to electricity is seen as an essential driver for economic growth in both developing and developed economies. It is based on the above premise that this paper empirically revisits the dynamic relationship between electricity consumption, real gross domestic product per capita and carbon dioxide emissions for the case of Nigeria. To this end, this study leverages on annual data from 1971-2014 for the econometrics analysis. This study employs relatively new estimation techniques that accommodate for structural break(s). Stationarity properties of variables are investigated via Zivot-Andrews (1992) unit root stationarity test while, for long-run equilibrium relationship, Maki (2012) cointegration test is adopted, which accounts for multiple structural breaks. Subsequently, this study probes for direction of causation, through the Toda-Yamamoto (1995) approach. According to the Maki cointegration test, there exists a cointegration relationship between electricity consumption, economic growth and carbon dioxide emissions. Empirical findings validate the electricity-induced growth hypothesis for the study area. Further insights are elucidated in the discussion section of the study with possible action steps (implications).

DOI: http://dx.doi.org/10.5755/j01.ee.30.1.20748

Author Biographies

Festus Victor Bekun, Eastern Mediterranean University Economics department Famagusta Via Mersin 10 Turkey
Festus Victor Bekun is currently a PhD candidate in Department of Economics at the Eastern Mediterranean University. He also obtained his MSc in Economics
from the same institution. He is also a Research Assistant at the same
department. He teaches basic economic principles of micro and
macroeconomics and inferential statistics. His research interest is in the areas of
agricultural economics, energy economics and tourism economics
Mary Oluwatoyin Agboola, Finance and Banking Department, College of Business Dar Al Uloom University, 1 Mizan St., Al Falah, Riyadh 13314 Saudi Arabia

Mary Oluwatoyin Agboola is an Assistant Professor of economics at Finance and Banking Department, College of Business Dar Al Uloom University, 1 Mizan St., Al Falah, Riyadh 13314 Saudi Arabia. Where she teaches basic micro and macroeconomic principles; mathematics and calculus for business; statistics, money and banking; managerial economics; and advance macroeconomics.

Email Address: dudufam@gmail.com, maryagboola@dau.edu.sa

Published
2019-02-25
Section
ECONOMICS OF ENGINEERING DECISIONS