Hellenic Open University Conferences, International Conference on Business & Economics of the Hellenic Open University 2015

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Energy consumption and economic growth in South and Southeast Asian countries: Evidence from a dynamic panel data approach
Anthony N. Rezitis, Shaikh Mostak Ahammad

Building: Titania
Room: Socratis
Date: 2015-02-07 02:00 PM – 03:45 PM
Last modified: 2015-01-27

Abstract


This study examines the dynamic relationship between energy consumption and economic growth for nine South and Southeast Asian countries in a panel data framework. The time period for the study is 1990–2012, and the World Bank Development Indicators data set is used. Since the unit root and cointegration analysis evidenced mixed results, this study uses both panel vector autoregression (VAR) and panel vector error correction model (VECM) methods to investigate the relationship between the variables. In addition, Granger causality tests and impulse response functions (IRFs) are also employed to examine the direction of causality and the effect of impulse responses between the variables. The panel cointegration analysis reveals that the long-run equilibrium relationship between real gross domestic product, energy consumption, real fixed capital formation and the labor force are positive and statistically significant indicating the existence of long-run co-movement among the variables. The panel Granger causality results support bidirectional causality effects between real gross domestic product and energy consumption meaning that these variables have strong interdependency between each other. The IRFs show that the greatest response of each variable is attributed to its own shock which is also supported by the cumulative effects of the right hand lagged variables.

 

 

 


Keywords


Panel VAR; Panel cointegration; Panel causality; Panel impulse response functions; SAARC; ASEAN