How Does Electricity Affect Economic Growth? Examining the Role of Government Policy to Selected Four South Asian Countries
Article
Article Title | How Does Electricity Affect Economic Growth? Examining the Role of Government Policy to Selected Four South Asian Countries |
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ERA Journal ID | 123161 |
Article Category | Article |
Authors | Rahman, Mohammad Mafizur, Rayhan, Istihak and Sultana, Nahid |
Journal Title | Energies |
Journal Citation | 16 (3), pp. 1-17 |
Article Number | 1417 |
Number of Pages | 17 |
Year | 2023 |
Publisher | MDPI AG |
Place of Publication | Switzerland |
ISSN | 1996-1073 |
Digital Object Identifier (DOI) | https://doi.org/https://doi.org/10.3390/en16031417 |
Web Address (URL) | https://www.mdpi.com/journal/energies |
Abstract | Electricity consumption and government policy are two vital elements for economic growth. Thus, this study explores the roles of electricity use and government policy in the economic growth of the selected four South Asian countries over the period from 1980 to 2014. The study includes the government policy variable in the extended Cobb–Douglas production function of the electricity driven growth model, which was absent in earlier studies. The pooled mean group-based panel autoregressive distributed lag (P-ARDL) method is used for empirical investigation, while fully modified ordinary least squares (FMOLS) and dynamic ordinary least square (DOLS) methods are used for checking the sensitivity of the P-ARDL estimates. Our results reveal that the effects of electricity, government spending, financial development and capital formation have significant positive effects on the economic growth of South Asia. However, exports and imports are found to have detrimental effects. Causality test reveals a unidirectional causality from electricity consumption to economic growth that supports the growth hypothesis. Following the findings, important policy recommendations are made to foster the economic growth in the South Asian countries. |
Keywords | economic growth; electricity use; government policy; panel ARDL; South Asian countries |
Contains Sensitive Content | Does not contain sensitive content |
ANZSRC Field of Research 2020 | 380112. Macroeconomics (incl. monetary and fiscal theory) |
389999. Other economics not elsewhere classified | |
380204. Panel data analysis | |
Byline Affiliations | School of Business |
Jahangirnagar University, Bangladesh |
https://research.usq.edu.au/item/w3870/how-does-electricity-affect-economic-growth-examining-the-role-of-government-policy-to-selected-four-south-asian-countries
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