Analyzing the relationship between economic growth and electricity consumption from renewable and non-renewable sources: Fresh evidence from newly industrialized countries. (April 2021)

• Record Type: Journal Article
• Authors: Azam, Anam; Rafiq, Muhammad; Shafique, Muhammad; Zhang, Haonan; Ateeq, Muhammad; Yuan, Jiahai
• Is Part Of: Sustainable energy technologies and assessments. Volume 44(2021)
• Publication Date: 2021-04
• Subjects: GDP Gross Domestic Product -- NRE Non-Renewable Energy Sources -- RE Renewable energy Sources -- CO2 Carbon dioxide emissions -- IEA International Energy Agency -- ELC Electricity consumption -- NIC Newly Industrialized Countries -- EC Energy consumption -- GCC Gulf Cooperation Council -- TYDL Toda – Yamamoto Doolado-Lutkepohl -- RELC Renewable electricity consumption -- NRELC Non-renewable electricity consumption -- FMOLS Fully modified ordinary least squares -- WDI World Development Indicators -- IPS Im-Pesaran-Shin -- LLC Levin-Lin-Chu -- ADF Augmented Dickey-Fuller -- VECM Vector Error Correction Model -- RPS Renewable Portfolio standard; Economic growth -- Renewable electricity consumption -- Non-renewable electricity consumption -- VECM -- Panel data; Renewable energy sources -- Periodicals; Energy development -- Technological innovations -- Periodicals; Electric power production -- Periodicals; Energy storage -- Periodicals; 333.79
• DOI: 10.1016/j.seta.2021.100991
• Languages: English
• ISSNs: 2213-1388

Abstract

Abstract: This study analyzes the impact of renewable electricity consumption on economic growth for the panel of 10 newly industrialized countries from 1990 to 2015. For this, panel unit root tests, panel heterogeneous co-integration method, panel Fully Modified Ordinary Least Square and the Granger causality method are employed. The primary outcomes of this study are as follows: (1) panel unit root test and panel co-integration method confirm that the economic growth, renewable electricity consumption, non-renewable electricity consumption, gross capital formation, labor force and trade openness are co-integrated, (2) panel Fully Modified Ordinary Least Square confirms that all studied variables have a positive long-run effect on economic growth, a 1% increase in renewable and non-renewable electricity consumption increased economic growth by 0.095% and 0.017% respectively, (3) the outcomes from Granger causality test also illustrates that there is bidirectional causation between renewable electricity consumption and economic growth in both the short-run and long-run that supports the feedback hypothesis. From the empirical findings, the feedback hypothesis is valid for newly industrialized countries.