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The Asymmetric Impact of Oil Price and Electricity Consumption on Economic Growth: Evidence from Nigeria

Author

Listed:
  • Longe Adedayo Emmanuel
  • Adekoya Taiwo Matthew

    (Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, Nigeria)

  • Soyemi Caleb Olugbenga
  • Adekomi Idowu Jacob

    (Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Nigeria)

  • Agbanuji David Adeiza

    (Energy Economics, Management and Policy, Emerald Energy Institute, Uniport)

Abstract

The study examines the asymmetric impact of oil price and electricity consumption on economic growth in Nigeria between 1981 and 2018 using the Non-Linear Autoregressive Distributed Lag (NARDL) model. Results reveal that falling and increasing oil prices as well as gross capital formation affect economic growth in Nigeria negatively and significantly in the short-run, while electricity consumption affects economic growth positively and significantly in the short-run. In the long-run, the impact on economic growth of negative changes in oil price is negative and insignificant, while positive changes in oil price have a positive but insignificant impact on economic growth. The impact on the economic growth of electricity consumption remains positive but insignificant while that of gross capital formation is positive and significant. The results suggest that both in the short and the long run positive changes in oil price have greater impact on the economic growth than negative oil price changes. Capital formation is a significant determinant of Nigerian economic growth both in the short and the long run.

Suggested Citation

  • Longe Adedayo Emmanuel & Adekoya Taiwo Matthew & Soyemi Caleb Olugbenga & Adekomi Idowu Jacob & Agbanuji David Adeiza, 2021. "The Asymmetric Impact of Oil Price and Electricity Consumption on Economic Growth: Evidence from Nigeria," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 9(1), pages 50-70, September.
    • Handle: RePEc:vrs:auseab:v:9:y:2021:i:1:p:50-70:n:9
    DOI: 10.2478/auseb-2021-0003
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    More about this item

    Keywords

    oil price; electricity consumption; economic growth; NARDL;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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