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The Relationship Between Energy Consumption and Economic Growth: Panel Data Analysis by Country Groups

Author

Listed:
  • Okyay Uçan

    (Nigde Omer Halisdemir University)

  • Ecem Turgut

    (Nigde Omer Halisdemir University)

  • Ayberk Nuri Berkman

    (Nigde Omer Halisdemir University)

Abstract

This study aimed to analyze the relationship between energy consumption (EC) and economic growth (EG). Mostly, the relationship between energy and economic growth has been analyzed in certain country groups, whereas in this study, three different country groups were considered and compared. To this end, countries were categorized into three different groups, such as low-income developing, emerging market, and middle-income, and advanced economies. Thus, it was revealed whether the results varied across country groups. Ten country samples from each country group and a total of 30 country samples were utilized. The data of both EG and EC obtained over the period 1990–2022 were utilized. A panel LM test was performed to analyze the relationship between variables. As a result of the test, although a cointegration relationship existed between EG and EC in low-income developing countries, no cointegration relationship was found in emerging markets, and middle-income, or advanced economies. Therefore, it was concluded that the relationship between EC and EG might have varied according to the development levels of the countries. In addition, empirical evidence confirmed that a unilateral causality from EG to EC was determined only in low-income developing countries. These empirical insights are of particular interest to policymakers as they help to build substantial economic policies to sustain economic development.

Suggested Citation

  • Okyay Uçan & Ecem Turgut & Ayberk Nuri Berkman, 2025. "The Relationship Between Energy Consumption and Economic Growth: Panel Data Analysis by Country Groups," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(2), pages 7191-7207, June.
  • Handle: RePEc:spr:jknowl:v:16:y:2025:i:2:d:10.1007_s13132-024-02137-y
    DOI: 10.1007/s13132-024-02137-y
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    More about this item

    Keywords

    Energy consumption; Economic growth; Panel LM test; Dumitrescu-Hurlin causality test;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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