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Re-visting the electricity-growth nexus in South Africa

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  • Phiri, Andrew
  • Bothwell, Nyoni

Abstract

This research study contributes to the ever-expanding literature by examining multivariate cointegration and causality relationships between electricity consumption, economic growth and other growth determinants for quarterly South African data collected between 1994/Q1 – 2014/Q4. The motivation behind this current research case study becomes apparent when taking into consideration that no previous studies have gone further than bivariate and trivariate analysis in investigating the electricity-growth nexus in South Africa. In conducting our empirical investigation, our obtained empirical results are two-fold in nature. Firstly, we find significant multivariate long-run cointegration relationships between economic growth, electricity consumption and other growth determinants. Secondly, our empirical analysis offers support in favour of the neutrality hypothesis, that is, the notion of no causal effects existing between electricity consumption and economic growth in the long-run. However, we find that exports directly cause electricity consumption whereas economic growth, domestic investment and employment levels causally flow to exports.

Suggested Citation

  • Phiri, Andrew & Bothwell, Nyoni, 2015. "Re-visting the electricity-growth nexus in South Africa," MPRA Paper 64489, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:64489
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    Cited by:

    1. Poppy Dyasi & Andrew Phiri, 2019. "A Sectoral Approach to the Electricity-growth Nexus in the Eastern Cape Province of South Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 269-276.
    2. Tafadzwa Ruzive & Thando Mkhombo & Simbarashe Mhaka & Nomahlubi Mavikela & Andrew Phiri, 2019. "Electricity Intensity and Unemployment in South Africa: A Quantile Regression Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 31-40.
    3. Andrew Phiri & Bothwell Nyoni, 2023. "Clean versus dirty electricity generation and economic growth in South Africa: time–frequency study," Economic Change and Restructuring, Springer, vol. 56(4), pages 2801-2824, August.
    4. Bothwell Nyoni & Andrew Phiri, 2020. "Renewable Energy - Economic Growth Nexus in South Africa: Linear, Nonlinear or Non-existent?," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 635-644.
    5. Anam Zahra & Sadaf Razzaq & Ahsan Nazir, 2016. "Impact of Electricity Consumption and Transport Infrastructure on the Economic Growth of Pakistan," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(10), pages 291-300, October.
    6. Minyoung Yang & Jinsoo Kim, 2020. "Revisiting the Relation between Renewable Electricity and Economic Growth: A Renewable–Growth Hypothesis," Sustainability, MDPI, vol. 12(8), pages 1-22, April.

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    More about this item

    Keywords

    Electricity consumption; Economic growth; Investment; Inflation; Employment; Exports; Co-integration; Granger causality; South Africa;
    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
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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