The causal dynamics between coal consumption and growth: Evidence from emerging market economies

This study examines the relationship between coal consumption and economic growth for 15 emerging market economies within a multivariate panel framework over the period 1980-2006. The heterogeneous panel cointegration results indicate there is a long-run equilibrium relationship between real GDP, coal consumption, real gross fixed capital formation, and the labor force. While in the long-run both real gross fixed capital formation and the labor force have a significant positive impact on real GDP, coal consumption has a significant negative impact. The panel causality tests show bidirectional causality between coal consumption and economic growth in both the short- and long-run.

[1]  Andrew T. Levin,et al.  Unit root tests in panel data: asymptotic and finite-sample properties , 2002 .

[2]  W. Nel,et al.  Defining limits: Energy constrained economic growth , 2010 .

[3]  Ramazan Sari,et al.  Disaggregate energy consumption, employment and income in Turkey , 2004 .

[4]  Hao-Yen Yang,et al.  Coal Consumption and Economic Growth in Taiwan , 2000 .

[5]  E. Ziramba.  Disaggregate energy consumption and industrial production in South Africa , 2009 .

[6]  Nicholas Apergis,et al.  Energy consumption and economic growth: Evidence from the Commonwealth of Independent States , 2009 .

[7]  P. Pedroni.  PANEL COINTEGRATION: ASYMPTOTIC AND FINITE SAMPLE PROPERTIES OF POOLED TIME SERIES TESTS WITH AN APPLICATION TO THE PPP HYPOTHESIS , 2004, Econometric Theory.

[8]  J. E. Payne,et al.  Renewable energy consumption and economic growth: Evidence from a panel of OECD countries , 2010 .

[9]  Yemane Wolde-Rufael,et al.  Disaggregated industrial energy consumption and GDP: the case of Shanghai, 1952-1999 , 2004 .

[10]  Ramazan Sarı,et al.  Energy consumption, economic growth, and carbon emissions: Challenges faced by an EU candidate member , 2009 .

[11]  P. Gil.  Animal spirits and the composition of innovation in a lab-equipment R&D model with transition , 2009 .

[12]  James E. Payne,et al.  US Disaggregate Fossil Fuel Consumption and Real GDP: An Empirical Note , 2011 .

[13]  Ramazan Sari,et al.  The relationship between disaggregate energy consumption and industrial production in the United States: An ARDL approach , 2008 .

[14]  M. Hashem Pesaran,et al.  Pooled Mean Group Estimation of Dynamic Heterogeneous Panels , 1999 .

[15]  Seung-Hoon Yoo,et al.  Causal relationship between coal consumption and economic growth in Korea , 2006 .

[16]  D. Holtz-eakin.  Testing for Individual Effects in Dynamic Models Using Panel Data , 1986 .

[17]  M. Pesaran,et al.  Testing for unit roots in heterogeneous panels , 2003 .

[18]  Tomás del Barrio Castro,et al.  Breaking the Panels: An Application to the GDP Per Capita , 2005 .

[19]  C. Granger,et al.  Co-integration and error correction: representation, estimation and testing , 1987 .

[20]  G. Maddala,et al.  A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test , 1999 .

[21]  Chun-Ping Chang,et al.  STRUCTURAL BREAKS, ENERGY CONSUMPTION, AND ECONOMIC GROWTH REVISITED: EVIDENCE FROM TAIWAN , 2005 .

[22]  Douglas B. Reynolds,et al.  Former Soviet Union oil production and GDP decline: Granger causality and the multi-cycle Hubbert curve , 2008 .

[23]  Nicholas Apergis,et al.  Energy consumption and economic growth in Central America: Evidence from a panel cointegration and error correction model , 2009 .

[24]  P. Pedroni.  Current Version : July 25 , 1999 CRITICAL VALUES FOR COINTEGRATION TESTS IN HETEROGENEOUS PANELS WITH MULTIPLE REGRESSORS * , 1999 .

[25]  Yemane Wolde-Rufael,et al.  Coal consumption and economic growth revisited , 2010 .

[26]  J. E. Payne,et al.  A survey of the electricity consumption-growth literature , 2010 .

[27]  Ramazan Sarı,et al.  Are global warming and economic growth compatible? Evidence from five OPEC countries? , 2009 .

[28]  Nicholas Apergis,et al.  Coal consumption and economic growth: Evidence from a panel of OECD countries , 2010 .

[29]  James E. Payne,et al.  On the dynamics of energy consumption and output in the US , 2009 .

[30]  A. Banerjee,et al.  Panel data unit roots and cointegration: an overview Oxford Bulletin of Economics & Statistics 61 , 1999 .

[31]  Peter Pedroni,et al.  Fully modified OLS for heterogeneous cointegrated panels , 2001 .

[32]  Jin-Li Hu,et al.  Disaggregated energy consumption and GDP in Taiwan : A threshold co-integration analysis , 2008 .

[33]  James E. Payne,et al.  Survey of the international evidence on the causal relationship between energy consumption and growth , 2010 .

[34]  Hao-Yen Yang,et al.  A note on the causal relationship between energy and GDP in Taiwan , 2000 .

[35]  Jiahai Yuan,et al.  Energy consumption and economic growth : Evidence from China at both aggregated and disaggregated levels , 2008 .

[36]  P. Narayan,et al.  A panel data analysis of the determinants of oil consumption: The case of Australia , 2009 .

[37]  Charles D. Kolstad,et al.  Natural resource use and the environment , 1993 .

[38]  Les Oxley,et al.  Modelling the causal relationship between energy consumption and GDP in New Zealand, Australia, India, Indonesia, The Philippines and Thailand , 2004, Math. Comput. Simul..

[39]  Li Jinke,et al.  Causality relationship between coal consumption and GDP: Difference of major OECD and non-OECD countries , 2008 .

[40]  Ramazan Sari,et al.  Disaggregate energy consumption and industrial output in the United States , 2007 .