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Examine the Empirical Relationship between Energy Consumption and Industrialization in Bangladesh: Granger Causality Analysis

Author

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  • Md. Hasanur Rahman

    (Department of Economics, Comilla University, Cumilla, Bangladesh,)

  • Alfarunnahar Ruma

    (Department of Economics, Jatiya Kabi Kazi Nazrul Islam University, Trishal, Mymensingh, Bangladesh.)

  • Mohammad Nasir Hossain

    (Department of Economics, Comilla University, Cumilla, Bangladesh,)

  • Rifat Nahrin

    (Department of Economics, Comilla University, Cumilla, Bangladesh,)

  • Shapan Chandra Majumder

    (Department of Economics, Comilla University, Cumilla, Bangladesh,)

Abstract

The current study examines the empirical relation between energy consumption and industrialization concerning other macroeconomic variables like as infrastructure, manufacturing, and capital formation with covering the period from 1975 to 2018. The Johansen co-integration estimation asserts the long-run association in this process. Whatever granger causality shows the bidirectional causality between electricity consumption and industrialization. Capital formation and industrialization have the bidirectional causality also. A unidirectional causality exists between oil and industrialization where manufacturing and industrialization have bidirectional causality. The estimated result of the error correction mechanism (ECM) shows the speed of long-run equilibrium at 45% within the time. The ECT has been significant at a 1% level with a pessimistic sign. The assistances of this attempt ensuring the importance of energy use and energy supervision in the aspect of industrial enlargement with making an allowance for the other macroeconomic indicators.

Suggested Citation

  • Md. Hasanur Rahman & Alfarunnahar Ruma & Mohammad Nasir Hossain & Rifat Nahrin & Shapan Chandra Majumder, 2021. "Examine the Empirical Relationship between Energy Consumption and Industrialization in Bangladesh: Granger Causality Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 121-129.
    • Handle: RePEc:eco:journ2:2021-03-15
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    References listed on IDEAS

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    More about this item

    Keywords

    Industrialization; Energy; DOLS; Granger Causality;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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