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Re-Visting The Electricity-Growth Nexus In South Africa

Author

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  • PHIRI Andrew

    (School of Economics, Faculty of Economic and Management Sciences,North West University (Potchefstroom Campus), South Africa)

  • NYONI Bothwell

    (Department of Applied Chemistry, Faculty of Applied Sciences,National University of Science and Technology (Bulawayo) Zimbabwe)

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 & NYONI Bothwell, 2016. "Re-Visting The Electricity-Growth Nexus In South Africa," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 11(1), pages 97-111, April.
  • Handle: RePEc:blg:journl:v:11:y:2016:i:1:p:97-111
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    References listed on IDEAS

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    Cited by:

    1. Ruzive, Tafadzwa & Mkhombo, Thando & Mhaka, Simba & Mavikela, Nomahlubi & Phiri, Andrew, 2017. "Electricity intensity and unemployment in South Africa: A quantile regression analysis," MPRA Paper 81717, University Library of Munich, Germany.
    2. 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.

    More about this item

    Keywords

    Electricity consumption; Economic growth; Co-integration; Granger causality; South Africa;

    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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