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Energy Consumption and Economic Growth: Evidence from COMESA Countries

Author

Listed:
  • Chali Nondo

    (Division of Resource Management, West Virginia University)

  • Mulugeta Kahsai

    (Department of Technology, Virginia State University)

  • Peter Schaeffer

    (Division of Resource Management, West Virginia University)

Abstract

This study applies panel data techniques to investigate the long-run relationship between energy consumption and GDP for a panel of 19 African countries (COMESA) based on annual data for the period 1980-2005. In the first step, we examine the degree of integration between GDP and energy consumption and find that the variables are integrated of order one. In the second step, we investigate the long-run relationship between energy consumption and GDP; our results provide strong evidence that GDP and energy consumption move together in the long-run. In the third step, we estimate the long-run relationship and test for causality using panel-based error correction models and find a long-run bidirectional relationship between GDP and energy consumption. Further, our analyses reveal that causation runs from energy consumption to GDP for low income COMESA countries.

Suggested Citation

  • Chali Nondo & Mulugeta Kahsai & Peter Schaeffer, 2010. "Energy Consumption and Economic Growth: Evidence from COMESA Countries," Working Papers Working Paper 2010-01, Regional Research Institute, West Virginia University.
    • Handle: RePEc:rri:wpaper:2010wp01
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    File URL: https://researchrepository.wvu.edu/rri_pubs/87/
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    Cited by:

    1. Egbichi Comfort & Abuh Ojamaliya & Okafor Victoria & Godwin Abigail & Adedoyin Oluwapelumi, 2018. "Dynamic Impact of Energy Consumption on the Growth of Nigeria Economy (1986-2016): Evidence from Symmetrical Autoregressive Distributed Lag Model," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 188-195.
    2. Ismail Oladimeji Soile, 2015. "Bivariate Cointegration Analysis of Energy-Economy Interactions in Iran," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(6), pages 125-139, December.
    3. Kahsai, Mulugeta S. & Nondo, Chali & Schaeffer, Peter V. & Gebremedhin, Tesfa G., 2012. "Income level and the energy consumption–GDP nexus: Evidence from Sub-Saharan Africa," Energy Economics, Elsevier, vol. 34(3), pages 739-746.
    4. Lin, Boqiang & Abudu, Hermas, 2019. "Changes in Energy Intensity During the development Process：Evidence in Sub-Saharan Africa and Policy Implications," Energy, Elsevier, vol. 183(C), pages 1012-1022.
    5. Anthony N. Rezitis & Shaikh Mostak Ahammad, 2015. "The Relationship between Energy Consumption and Economic Growth in South and Southeast Asian Countries: A Panel Vector Autoregression Approach and Causality Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 5(3), pages 704-715.
    6. Andi Desfiandi & Faurani Santi Singagerda & Anuar Sanusi, 2019. "Building an Energy Consumption Model and Sustainable Economic Growth in Emerging Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 51-66.
    7. Hossein-Ali Fakher & Seyed Ahmad Goldansaz, 2015. "Investigating the Impact of Growth of Petroleum Products Consumption on Economic Development with a Systematic Dynamics Approach in Developing Countries," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 19(3), pages 279-293, Autumn.
    8. Ibrahim, Abdulrazaq, 2020. "Effects of energy consumption, economic growth and population growth on carbon dioxide emissions: a dynamic approach for African economies (1990-2011)," MPRA Paper 97598, University Library of Munich, Germany.
    9. Laurine Chikoko & Tawedzerwa Ngundu & Kennedy Kupeta, 2018. "Economic Growth and Electricity Consumption in a Multivariate Framework: A Case of Zimbabwe 1980 to 2016," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 20-33, OCTOBER.

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    More about this item

    Keywords

    energy consumption; GDP; panel causality tests; COMESA;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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