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Electricity Consumption and Economic Growth: Trivariate investigation in Botswana with Capital Formation

Author

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  • Sakiru Adebola Solarin

    (Universiti Utara, Malaysia)

Abstract

This study investigates the relationship between electricity consumption and real gross domestic product in Botswana (the world’s largest producer of diamonds). The study includes capital formation in a trivariate system for the period covering 1980-2008. Zivot and Andrews (1992) unit roots test; bound test for cointegration, and Granger causality test are employed. Unidirectional causality is found from electricity consumption to real gross domestic product is in line with study of Altinay and Karagol (2005) among others. The long run estimate reinforce the Granger causality tests by indicating that electricity consumption is positively associated with real gross domestic product in the long run. Further findings suggest unidirectional causality from capital formation to real gross domestic product. The implication is that Botswana- being a highly energy dependent country- will have the performance of its capital formation on the economy partly determined by adequate electricity.

Suggested Citation

  • Sakiru Adebola Solarin, 2011. "Electricity Consumption and Economic Growth: Trivariate investigation in Botswana with Capital Formation," International Journal of Energy Economics and Policy, Econjournals, vol. 1(2), pages 32-46, September.
  • Handle: RePEc:eco:journ2:2011-02-1
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    Citations

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    Cited by:

    1. Maria Pempetzoglou, 2014. "Electricity Consumption and Economic Growth: A Linear and Nonlinear Causality Investigation for Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 263-273.
    2. Jamal BOUOIYOUR & Refk SELMI & Ilhan OZTURK, 2014. "The Nexus between Electricity Consumption and Economic Growth: New Insights from Meta-Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 621-635.
    3. Wadim Strielkowski & Michal Mirvald & Michael Pedersen, 2014. "Energy Integration in European Power Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 506-515.
    4. Hamdi, Helmi & Sbia, Rashid & Shahbaz, Muhammad, 2014. "The nexus between electricity consumption and economic growth in Bahrain," Economic Modelling, Elsevier, vol. 38(C), pages 227-237.
    5. Solarin, Sakiru Adebola & Shahbaz, Muhammad, 2013. "Trivariate causality between economic growth, urbanisation and electricity consumption in Angola: Cointegration and causality analysis," Energy Policy, Elsevier, vol. 60(C), pages 876-884.
    6. 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.
    7. Mbanda L. Njoke & Zhongqun Wu & Jean Gaston Tamba, 2019. "Empirical Analysis of Electricity Consumption, CO2 Emissions and Economic Growth: Evidence from Cameroon," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 63-73.
    8. Harkat, Tahar, 2020. "Causality between Energy Consumption and Economic Development: Empirical Evidence from Morocco," MPRA Paper 98313, University Library of Munich, Germany.
    9. Solarin, Sakiru Adebola & Ozturk, Ilhan, 2016. "The relationship between natural gas consumption and economic growth in OPEC members," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1348-1356.
    10. Saleheen, Khan & Farooq Ahmed, Jam & Muhammad, Shahbaz, 2012. "Electricity Consumption and Economic Growth in Kazakhstan: Fresh Evidence from a Multivariate Framework Analysis," MPRA Paper 43460, University Library of Munich, Germany, revised 20 Dec 2012.
    11. Solarin, Sakiru Adebola & Ozturk, Ilhan, 2015. "On the causal dynamics between hydroelectricity consumption and economic growth in Latin America countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1857-1868.
    12. Adeyemi A. Ogundipe & Opeyemi Akinyemi & Oluwatomisin M. Ogundipe, 2016. "Electricity Consumption and Economic Development in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 6(1), pages 134-143.
    13. Muhammad Shahbaz & Ijaz Ur Rehman & Rashid Sbia & Helmi Hamdi, 2016. "The Role of Information Communication Technology and Economic Growth in Recent Electricity Demand: Fresh Evidence from Combine Cointegration Approach in UAE," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(3), pages 797-818, September.

    More about this item

    Keywords

    Economic growth; Electricity consumption; Bound test; Causality; Structural break; Botswana;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • 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
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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