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The Role of Information Communication Technology and Economic Growth in Recent Electricity Demand: Fresh Evidence from Combine Cointegration Approach in UAE

Shahbaz, Muhammad and Sbia, Rashid and HAMDI, Helmi and Ur Rehman, Ijaz (2014): The Role of Information Communication Technology and Economic Growth in Recent Electricity Demand: Fresh Evidence from Combine Cointegration Approach in UAE.

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Abstract

This paper investigates relationship between information communication technology (ICT), economic growth and electricity consumption using data of UAE over the period of 1975-2011.We have tested the unit properties of variables and the Bayer and Hanck combined cointegration approach for long run relationship. The innovative accounting approach is applied to test the robustness of the VECM Granger causality findings. Our empirical results confirm the existence of cointegration between the series. We find that ICT adds in electricity demand but electricity prices lower it. Income growth increases electricity consumption. The non-linear relationship between ICT and electricity consumption is an Inverted U-shaped. The causality results reveal that ICT and electricity prices Granger cause electricity demand. The feedback effect exists between economic growth and electricity consumption

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