IDEAS home Printed from https://ideas.repec.org/a/hde/epregl/v70y2019i1p41-61.html

Energy Consumption And Financial Development In South Africa: An Empirical Investigation

Author

Listed:
  • Nicholas M. Odhiambo

    (University of South Africa (UNISA), Pretoria, South Africa)

Abstract

This paper examines the dynamic relationship between energy consumption and financial development in South Africa during the period 1980- 2013. In order to address the omission of variable bias, the study has included economic growth as an intermittent variable between financial development and energy consumption. Unlike some previous studies, this study uses three proxies for financial development: i) domestic credit to the private sector as a percentage of GDP as a proxy for financial institutions’ depth; ii) bank credit to bank deposits as a proxy for financial institutions’ stability; and iii) bank lending-deposit spread as a proxy for financial institutions’ efficiency. Using the ARDL bounds testing approach to cointegration and Granger-causality test, the obtained results show that there is a distinct long-run unidirectional causal flow from financial development to energy consumption in South Africa. This applies irrespective of which proxy has been used to measure the level of financial development. The study also finds that there is a long-run unidirectional causality from economic growth to energy consumption, and a unidirectional causality from economic growth to financial development when bank lending-deposit interest rates spread is used as a proxy for financial development. This, therefore, implies that energy consumption in South Africa is largely driven by the growth-led financial development in the long run.

Suggested Citation

  • Nicholas M. Odhiambo, 2019. "Energy Consumption And Financial Development In South Africa: An Empirical Investigation," Ekonomski pregled, Hrvatsko društvo ekonomista (Croatian Society of Economists), vol. 70(1), pages 41-61.
    • Handle: RePEc:hde:epregl:v:70:y:2019:i:1:p:41-61
    DOI: 10.32910/ep.70.1.3
    as

    Download full text from publisher

    File URL: https://doi.org/10.32910/ep.70.1.3
    Download Restriction: no
    File URL: https://libkey.io/10.32910/ep.70.1.3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Palesa Milliscent Lefatsa & Kin Sibanda & Rufaro Garidzirai, 2021. "The Relationship between Financial Development and Energy Consumption in South Africa," Economies, MDPI, vol. 9(4), pages 1-21, October.
    2. Qamruzzaman, Md & Jianguo, Wei, 2020. "The asymmetric relationship between financial development, trade openness, foreign capital flows, and renewable energy consumption: Fresh evidence from panel NARDL investigation," Renewable Energy, Elsevier, vol. 159(C), pages 827-842.
    3. Chigozie Nelson Nkalu & Samuel Chinwero Ugwu & Fredrick O. Asogwa & Mwuese Patricia Kuma & Queen O. Onyeke, 2020. "Financial Development and Energy Consumption in Sub-Saharan Africa: Evidence From Panel Vector Error Correction Model," SAGE Open, , vol. 10(3), pages 21582440209, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hde:epregl:v:70:y:2019:i:1:p:41-61. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Josip Tica (email available below). General contact details of provider: https://edirc.repec.org/data/hdeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.