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Electricity Consumption and Exports Growth: Revisiting the Feedback Hypothesis

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  • Bosupeng, Mpho

Abstract

The dynamic relationship between exports and energy has been an interesting area of research in macroeconomics. This paper contributes to the extant literature by examining the relationship between electricity consumption and exports revenue for forty different economies as from 1980-2012. The study commences by examining the time series for unit roots using the Augmented Dickey-Fuller (ADF) test. The results of the Johansen cointegration test reveal that twenty-one economies under investigation exhibited statistically long run affiliations between exports income and electricity consumption. Comparatively, the Saikkonen and Lu ̈tkepohl test proved that exports and electricity consumption are statistically cointegrated in the long run for all economies. The Granger causality test showed that exports income promote an increase in electricity consumption. However, exports in some economies were induced by electricity consumption. Most importantly, the validity of the feedback hypothesis is affirmed as bidirectional causal relationships between exports and electricity consumption surface in multiple economies.

Suggested Citation

  • Bosupeng, Mpho, 2017. "Electricity Consumption and Exports Growth: Revisiting the Feedback Hypothesis," MPRA Paper 81756, University Library of Munich, Germany, revised 2017.
  • Handle: RePEc:pra:mprapa:81756
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    Keywords

    exports; energy demand; electricity consumption; economic growth; feedback hypothesis.;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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