ORIGINAL PAPER
Economic development and the energy consumption nexus in developing countries: evidence from five South Asian countries
1
Department of Economics & Banking,, International Islamic University Chittagong, Bangladesh
2
Department of Economics & Banking, International Islamic University Chittagong, Bangladesh, Bangladesh
3
Economics, Stamford University Bangladesh, Bangladesh
4
Department of Economics & Banking, International Islamic University Chittagong, Bangladesh
Submission date: 2022-10-25
Final revision date: 2023-02-20
Acceptance date: 2023-02-21
Publication date: 2023-03-24
Corresponding author
Zobayer Ahmed
Department of Economics & Banking, International Islamic University Chittagong, Bangladesh, Bangladesh
Department of Economics & Banking, International Islamic University Chittagong, Bangladesh, Bangladesh
Polityka Energetyczna – Energy Policy Journal 2023;26(1):111-132
KEYWORDS
TOPICS
ABSTRACT
This paper investigates the relationship between energy use and economic development in five South-Asian countries using national-level panel data from 1990 to 2014. Although many studies have already addressed the nexus between energy consumption and economic growth, there is a mixed finding. According to many researchers, South Asian countries have expanded energy consumption since the 1990s. Therefore, energy consumption as a variable for a specific period is considered for the countries of Bangladesh, India, Nepal, Pakistan and Sri Lanka. Furthermore, foreign direct investment (FDI) and international trade (IT) are also considered to be related variables in this study. Pooled ordinary least squares, random effects, and fixed effects estimation techniques are used to provide a reliable estimation, offsetting the country fixed effects. The fixed effect model is the most effective model that reveals the association between electricity usage and growth factors, as per the specification test and Hausman test. A statistically significant correlation was found between international trade, FDI, economic growth, and power usage. FDI has the highest impact on the rising power demand, followed by global commerce and per capita GDP (gross domestic product). More specifically, the study findings reveal that increased power consumption causes more investment, which results in increased economic growth in South Asian countries. The findings of the study further show that FDI significantly impacted upon power consumption and the area of SAARC’s energy demand, resulting in the entry of new technology and an increase in both economic growth and energy consumption. Future policies may focus on investment in the energy sector to promote economic development.
METADATA IN OTHER LANGUAGES:
Polish
Rozwój gospodarczy i związek zużycia energii w krajach rozwijających się: dowody z pięciu krajów Azji Południowej
zużycie energii elektrycznej, energia, PKB per capita, BIZ, handel międzynarodowy, dane panelowe, region SAARC
W niniejszym artykule zbadano związek między zużyciem energii a rozwojem gospodarczym w pięciu krajach Azji Południowej na podstawie danych panelowych na poziomie krajowym w latach 1990–2014. Chociaż wiele badań dotyczyło już związku między zużyciem energii a wzrostem gospodarczym, wyniki są mieszane. Według wielu badaczy kraje Azji Południowej zwiększyły zużycie energii od lat 90. W związku z tym zużycie energii, jako zmienna dla określonego okresu, jest rozpatrywane dla krajów Bangladeszu, Indii, Nepalu, Pakistanu i Sri Lanki. Ponadto bezpośrednie inwestycje zagraniczne (BIZ) i handel międzynarodowy (IT) są również uważane za powiązane zmienne w tym badaniu. Aby zapewnić wiarygodne oszacowanie, kompensując efekty stałe kraju, stosuje się połączone techniki najmniejszych kwadratów, efekty losowe i efekty stałe. Model z efektem stałym jest najbardziej efektywnym modelem, który ujawnia związek między zużyciem energii elektrycznej a czynnikami wzrostu, zgodnie z testem specyfikacji i testem Hausmana. Stwierdzono statystycznie istotną korelację między handlem międzynarodowym, BIZ, wzrostem gospodarczym i zużyciem energii. Największy wpływ na rosnące zapotrzebowanie na energię mają BIZ, a następnie światowy handel i PKB per capita (produkt krajowy brutto). Dokładniej, wyniki badania pokazują, że zwiększone zużycie energii powoduje więcej inwestycji, co skutkuje zwiększonym wzrostem gospodarczym w krajach Azji Południowej. Wyniki badania pokazują ponadto, że BIZ znacząco wpłynęły na zużycie energii i obszar zapotrzebowania SAARC na energię, powodując wejście nowych technologii i wzrost zarówno wzrostu gospodarczego, jak i zużycia energii. Przyszłe polityki mogą koncentrować się na inwestycjach w sektorze energetycznym w celu wspierania rozwoju gospodarczego.
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