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Electricity consumption and economic growth nexus: Evidence from MENA countries

Bouoiyour, Jamal and Selmi, Refk (2012): Electricity consumption and economic growth nexus: Evidence from MENA countries.

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The objective of this study is to investigate the causality between electricity consumption and economic growth for a panel of twelve MENA countries (seven energy exporters and five energy importers) over the period 1975–2010 within a bivariate framework. To examine this linkage, we applied panel cointegration methods and panel causality test. Our results show that 16.66% of MENA countries supported the growth hypothesis, 25% the conservation hypothesis, 33.33% the feedback hypothesis and 25% the neutrality hypothesis. Furthermore, we found that 14.28% of MENA energy exporters supported the growth hypothesis at the same way of conservation hypothesis, 42.88% the feedback hypothesis and 28.57% the neutrality hypothesis. Thereafter, we argue that Iran and Turkey are leaders in terms of the interaction between energy usage and growth. This may be mainly due to a good structuring of the electricity sector. This favorable position of these economies comparable to the rest of MENA countries leads to an essential recommendation which is the reorganization of the electricity sector.

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