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Energy Consumption and Economic Growth for Small Island Developing States: A Panel ARDL Approach

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  • FAUZEL Sheereen

    (Senior Lecturer in Banking & Financial Services Dept of Finance & Accounting/Faculty of Law and Management University of Mauritius, Reduit, Mauritius.)

Abstract

Global warming has been internationally debated and significant importance has been laid on the link between energy conservation policies and economic growth. Studies on the energy consumption-growth nexus has been widely discussed but such studies has not reached a consensus. In addition to that this topic has not been widely investigated for the case of small island developing states (SIDS). The present study aim at investigating the link between energy consumption and Economic growth for a panel of SIDS over the period 1990-2016. The panel autoregressive distributed lag (PARDL) has been considered for this purpose. The study finds that in both the long run and short run, there is a direct link between energy consumption and economic growth. Moreover, CO2 emissions, foreign investment and trade openness are seen to be determinants of economic growth in the long run. From this investigation, it can be concluded that energy conservation policies would not benefit the economies in terms of economic growth. However, to attain sustainable development, low carbon alternatives should in used. For instance, the economies could adopt renewable energy policies.

Suggested Citation

  • FAUZEL Sheereen, 2019. "Energy Consumption and Economic Growth for Small Island Developing States: A Panel ARDL Approach," Energy Economics Letters, Asian Economic and Social Society, vol. 6(1), pages 23-29, March.
  • Handle: RePEc:asi:eneclt:2019:p:23-29
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    References listed on IDEAS

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    Keywords

    Energy consumption; Economic growth; PARDL; SIDS.;

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