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Electricity consumption and economic growth in Burkina Faso: A cointegration analysis

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  • Ouédraogo, Idrissa M.
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    Abstract

    This study empirically establishes the direction of causality between electricity consumption and economic growth in Burkina Faso for the period 1968-2003. The bounds test yields evidence of cointegration between electricity consumption, GDP, and capital formation when electricity consumption and GDP are used as dependent variable. Causality results indicate that there is no significant causal relationship between electricity consumption and investment. Estimates, however, detect in the long-run a bidirectional causal relationship between electricity use and real GDP. There is also evidence of a positive feedback causal relationship between GDP and capital formation. Burkina Faso is therefore an energy dependent country. It is also a country in which electricity consumption is growing with the level of income. All of this shows that electricity is a significant factor in socio-economic development in Burkina Faso; as such, energy policy must be implemented to ensure that electricity generates fewer potential negative impacts.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 32 (2010)
    Issue (Month): 3 (May)
    Pages: 524-531

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    Handle: RePEc:eee:eneeco:v:32:y:2010:i:3:p:524-531

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    Web page: http://www.elsevier.com/locate/eneco

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    Keywords: Electricity consumption Cointegration Causality Burkina Faso;

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    Citations

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    Cited by:
    1. Litvine, Dorian & Gazull, Laurent & Dabat, Marie-Hélène, 2014. "Assessing the potential demand for biofuel by combining Economics and Psychology: A focus on proximity applied to Jatropha oil in Africa," Ecological Economics, Elsevier, vol. 100(C), pages 85-95.
    2. Nayan, Sabri & Kadir, Norsiah & Ahmad, Mahyudin & Abdullah, Mat Saad, 2013. "Revisiting Energy Consumption and GDP: Evidence from Dynamic Panel Data Analysis," MPRA Paper 48714, University Library of Munich, Germany.
    3. Phiri, Andrew & Nyoni, Botha, 2014. "The electricity-growth nexus in South Africa: Evidence from asymmetric co-integration and co-feature analysis," MPRA Paper 56145, University Library of Munich, Germany.
    4. Muhammad, Shahbaz, 2011. "Electricity Consumption, Financial Development and Economic Growth Nexus: A Revisit Study of Their Causality in Pakistan," MPRA Paper 35588, University Library of Munich, Germany, revised 27 Dec 2011.
    5. Eggoh, Jude C. & Bangake, Chrysost & Rault, Christophe, 2011. "Energy consumption and economic growth revisited in African countries," Energy Policy, Elsevier, vol. 39(11), pages 7408-7421.
    6. Ozturk, Ilhan & Aslan, Alper & Kalyoncu, Huseyin, 2010. "Energy consumption and economic growth relationship: Evidence from panel data for low and middle income countries," Energy Policy, Elsevier, vol. 38(8), pages 4422-4428, August.
    7. Shahbaz, Muhammad & Mutascu, Mihai & Tiwari, Aviral Kumar, 2012. "Revisiting the Relationship between Electricity Consumption, Capital and Economic Growth: Cointegration and Causality Analysis in Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 97-120, September.
    8. Tang, Chor Foon & Shahbaz, Muhammad, 2011. "Revisiting the Electricity Consumption-Growth Nexus for Portugal: Evidence from a Multivariate Framework Analysis," MPRA Paper 28393, University Library of Munich, Germany.

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