Energy Dependence in Developing Countries: Does the Level of Income Matter?
Nicholas Odhiambo
Atlantic Economic Journal, 2014, vol. 42, issue 1, 65-77
Abstract:
This paper re-examines the causal relationship between energy consumption and economic growth in four developing countries. The four countries include two lower-middle income economies, Ghana and Cote d’Ivoire, and two upper-middle income economies, Brazil and Uruguay. The study attempts to answer one critical question: Is the causal relationship between energy consumption and economic growth sensitive to a country’s level of income? In order to account for the omission-of-variable bias, the study incorporates exports as an intermittent variable between energy consumption and economic growth—thereby creating a simple multivariate model. Using the auto-regressive distributed lag (ARDL)-bounds testing procedure, our results show that while energy consumption Granger-causes economic growth in upper-middle income countries, in lower-middle income countries it is economic growth that drives energy consumption. Copyright International Atlantic Economic Society 2014
Keywords: Developing countries; Energy dependence; Economic growth; Q43; C32; O40 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:42:y:2014:i:1:p:65-77
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DOI: 10.1007/s11293-013-9402-2
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