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Is energy consumption sensitive to foreign capital inflows and currency devaluation in Pakistan?

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Listed:
  • Muhammad Shahbaz
  • Amatul Razzaq Chaudhary
  • Syed Jawad Hussain Shahzad

Abstract

This study investigates the relationship between foreign capital inflows and energy consumption by incorporating economic growth, exports and currency devaluation in energy demand function for the case of Pakistan. The long-run and short-run effects are examined via ARDL bounds testing procedure. Foreign capital inflows and currency devaluation (economic growth and exports) decrease (increase) energy consumption in long-run. The results confirm a feedback effect between foreign capital inflows and energy consumption. These findings would be helpful to policy makers in designing comprehensive economic and energy policies for utilizing foreign capital inflows as a tool for optimal use of energy sources to enhance economic development in long run.

Suggested Citation

  • Muhammad Shahbaz & Amatul Razzaq Chaudhary & Syed Jawad Hussain Shahzad, 2020. "Is energy consumption sensitive to foreign capital inflows and currency devaluation in Pakistan?," Applied Economics, Taylor & Francis Journals, vol. 50(52), pages 5641-5658, June.
    • Handle: RePEc:taf:applec:v:50:y:2020:i:52:p:5641-5658
    DOI: 10.1080/00036846.2018.1488059
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    14. Uche, Emmanuel & Ihezukwu, Veronica Adaku & Osunkwo, Folusho Olufunke Chinyere & Okoronkwo, Chijioke, 2021. "Does Oil Consumption Respond Asymmetrically to Oil Price, Exchange Rate and Income Differentials?," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 55(2), pages 51-63.
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    16. Tii N. Nchofoung, 2023. "Oil price shocks and energy transition in Africa," Working Papers 23/064, European Xtramile Centre of African Studies (EXCAS).
    17. Muhammad Shahbaz & Avik Sinha & Shabbir Ahmad & Zhilun Jiao & Zhaohua Wang, 2023. "Role of foreign direct investment in decomposing of scale and technique effects on China's energy consumption," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 3370-3385, July.
    18. Mohammad Makki & Jeanne Kaspard & Fleur Khalil & Jeanne Laure Mawad, 2024. "Renewable Energy Consumption Determinants: Do They Differ between Oil-Exporting Countries and Oil-Importing Ones?," Sustainability, MDPI, vol. 16(17), pages 1-22, August.

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    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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