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The impact of public capital stock on energy consumption: Empirical evidence from Latin America and the Caribbean region

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  • Koengkan, Matheus
  • Santiago, Renato
  • Fuinhas, José Alberto

Abstract

The impact of the stock of public capital on electricity consumption per capita is analysed for eighteen Latin American and Caribbean countries over the period ranging from 1971 to 2014. We rely on the ARDL approach to capture the complexity of short- and long-run relationships between the variables. The results support that the stock of public capital influences electricity consumption only on the short run, revealing that its impact is exerted mainly by an income effect that stimulates electricity consumption momently. The stock of public capital has no long-run impact on per capita electricity consumption, rising doubts on the quality of that public stock of capital to promote development. The modelling of the drivers of electricity consumption also revealed valuable insights into how the Latin American and Caribbean region has evolved. The availability of electricity generation only stimulates moderately per capita electricity consumption, supporting that the integration of Latin American and Caribbean grids that was able to disrupt the link between local generation and consumption. This conclusion is enforced by the no statistical significance of short-run impacts of the availability of electricity generation on per capita electricity consumption.

Suggested Citation

  • Koengkan, Matheus & Santiago, Renato & Fuinhas, José Alberto, 2019. "The impact of public capital stock on energy consumption: Empirical evidence from Latin America and the Caribbean region," International Economics, Elsevier, vol. 160(C), pages 43-55.
    • Handle: RePEc:eee:inteco:v:160:y:2019:i:c:p:43-55
    DOI: 10.1016/j.inteco.2019.09.001
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    Cited by:

    1. Matheus Belucio & Renato Santiago & José Alberto Fuinhas & Luiz Braun & José Antunes, 2022. "The Impact of Natural Gas, Oil, and Renewables Consumption on Carbon Dioxide Emissions: European Evidence," Energies, MDPI, vol. 15(14), pages 1-16, July.
    2. Emad Kazemzadeh & José Alberto Fuinhas & Matheus Koengkan & Fariba Osmani, 2022. "The Heterogeneous Effect of Economic Complexity and Export Quality on the Ecological Footprint: A Two-Step Club Convergence and Panel Quantile Regression Approach," Sustainability, MDPI, vol. 14(18), pages 1-24, September.
    3. Neves, Sónia Almeida & Marques, António Cardoso & Patrício, Margarida, 2020. "Determinants of CO2 emissions in European Union countries: Does environmental regulation reduce environmental pollution?," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 114-125.
    4. Santiago, Renato & Fuinhas, José Alberto & Marques, António Cardoso, 2020. "An analysis of the energy intensity of Latin American and Caribbean countries: Empirical evidence on the role of public and private capital stock," Energy, Elsevier, vol. 211(C).

    More about this item

    Keywords

    Electricity consumption; Public capital stock; Globalisation; Latin America; Macro panel; E50; F60; H54; Q43; O10;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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