Determinants of energy demand in African frontier market economies: An empirical investigation

Sudharshan Reddy Paramati; Mita Bhattacharya; Ilhan Ozturk; Abdulrasheed Zakari

doi:10.1016/j.energy.2018.01.146

Determinants of energy demand in African frontier market economies: An empirical investigation

Sudharshan Reddy Paramati (Lead / Corresponding author)
, Mita Bhattacharya
, Ilhan Ozturk
, Abdulrasheed Zakari

Research output: Contribution to journal › Article › peer-review

40 Citations (Scopus)

590 Downloads (Pure)

Abstract

Since the turn of the twenty-first century, the economic performance of Africa has been remarkable. We identify the key factors driving energy consumption from seven frontier market economies in Africa. More specifically, the role of economic, financial, and trade integrations are explored as the source of overall energy demand. First, we establish cross-sectional dependence and heterogeneity across countries. Second, the long-run elasticities of energy consumption reflect the key role of stock market indicators, along with industrialisation and trade openness while foreign direct investment (FDI) inflows have a reducing effect. In this respect, the long-run energy elasticities on individual countries show a considerable variation. Finally, the heterogeneous panel non-causality test confirms that the energy consumption has a feedback relationship with stock market indicators and industrialisation. Our findings reflect that the environmental planning should comprise development in financial and trade sectors in boosting economic growth and increasing energy demand for these countries.

Original language	English
Pages (from-to)	123-133
Number of pages	11
Journal	Energy
Volume	148
Early online date	3 Feb 2018
DOIs	https://doi.org/10.1016/j.energy.2018.01.146
Publication status	Published - 1 Apr 2018

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 7 Affordable and Clean Energy
SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities

Keywords

African frontier markets
Cross-sectional dependence
Energy consumption
Stock market development

ASJC Scopus subject areas

Civil and Structural Engineering
Building and Construction
Pollution
General Energy
Mechanical Engineering
Industrial and Manufacturing Engineering
Electrical and Electronic Engineering

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10.1016/j.energy.2018.01.146

Author accepted manuscript
© 2018. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Accepted author manuscript, 800 KBLicence: CC BY-NC-ND

Cite this

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title = "Determinants of energy demand in African frontier market economies: An empirical investigation",

abstract = "Since the turn of the twenty-first century, the economic performance of Africa has been remarkable. We identify the key factors driving energy consumption from seven frontier market economies in Africa. More specifically, the role of economic, financial, and trade integrations are explored as the source of overall energy demand. First, we establish cross-sectional dependence and heterogeneity across countries. Second, the long-run elasticities of energy consumption reflect the key role of stock market indicators, along with industrialisation and trade openness while foreign direct investment (FDI) inflows have a reducing effect. In this respect, the long-run energy elasticities on individual countries show a considerable variation. Finally, the heterogeneous panel non-causality test confirms that the energy consumption has a feedback relationship with stock market indicators and industrialisation. Our findings reflect that the environmental planning should comprise development in financial and trade sectors in boosting economic growth and increasing energy demand for these countries.",

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T2 - An empirical investigation

AU - Paramati, Sudharshan Reddy

AU - Bhattacharya, Mita

AU - Ozturk, Ilhan

AU - Zakari, Abdulrasheed

N1 - No funding

PY - 2018/4/1

Y1 - 2018/4/1

N2 - Since the turn of the twenty-first century, the economic performance of Africa has been remarkable. We identify the key factors driving energy consumption from seven frontier market economies in Africa. More specifically, the role of economic, financial, and trade integrations are explored as the source of overall energy demand. First, we establish cross-sectional dependence and heterogeneity across countries. Second, the long-run elasticities of energy consumption reflect the key role of stock market indicators, along with industrialisation and trade openness while foreign direct investment (FDI) inflows have a reducing effect. In this respect, the long-run energy elasticities on individual countries show a considerable variation. Finally, the heterogeneous panel non-causality test confirms that the energy consumption has a feedback relationship with stock market indicators and industrialisation. Our findings reflect that the environmental planning should comprise development in financial and trade sectors in boosting economic growth and increasing energy demand for these countries.

AB - Since the turn of the twenty-first century, the economic performance of Africa has been remarkable. We identify the key factors driving energy consumption from seven frontier market economies in Africa. More specifically, the role of economic, financial, and trade integrations are explored as the source of overall energy demand. First, we establish cross-sectional dependence and heterogeneity across countries. Second, the long-run elasticities of energy consumption reflect the key role of stock market indicators, along with industrialisation and trade openness while foreign direct investment (FDI) inflows have a reducing effect. In this respect, the long-run energy elasticities on individual countries show a considerable variation. Finally, the heterogeneous panel non-causality test confirms that the energy consumption has a feedback relationship with stock market indicators and industrialisation. Our findings reflect that the environmental planning should comprise development in financial and trade sectors in boosting economic growth and increasing energy demand for these countries.

KW - African frontier markets

KW - Cross-sectional dependence

KW - Energy consumption

KW - Stock market development

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DO - 10.1016/j.energy.2018.01.146

M3 - Article

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SN - 0360-5442

VL - 148

SP - 123

EP - 133

JO - Energy

JF - Energy

ER -

Determinants of energy demand in African frontier market economies: An empirical investigation

Abstract

UN SDGs

Keywords

ASJC Scopus subject areas

Access to Document

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