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The Nexus between Electricity Consumption and Economic Growth in Bahrain

Hamdi, Helmi and Sbia, Rashid and Shahbaz, Muhammad (2013): The Nexus between Electricity Consumption and Economic Growth in Bahrain.

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Abstract

This paper explores the relationship between electricity consumption, foreign direct investment, capital and economic growth in case of the Kingdom of Bahrain. The Cobb-Douglas production is used over the period of 1980Q1–2010Q4. We have the ARDL bounds testing approach and found that cointegration exists among the series. Electricity consumption, foreign direct investment and capital add in economic growth. The VECM Granger causality analysis has reported the feedback effect between electricity consumption and economic growth and same is true for foreign direct investment and electricity consumption. This suggests us to explore sources of energy to achieve sustainable economic development for long run.

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