Electricity consumption and economic growth in Vietnam: A cointegration and causality analysis

Le Quang, Canh (2011): Electricity consumption and economic growth in Vietnam: A cointegration and causality analysis. Published in: Journal of Economics and Development No. 43 (2011): pp. 24-36.

Abstract

Using a cointegration and causality analysis, this paper investigates the causal relationship between electricity consumption and economic growth in Vietnam during the period of 1975-2010. Empirical results show that there is no causality effect of per capita electricity consumption on per capita Gross domestic products (GDP) in both short-run and long-run, but a causality relationship running from per capita GDP to per capita electricity consumption in the long-run. This result is helpful to understand the roles of economic growth on making energy policies in Vietnam to deal with the current electricity shortage accompanied with economic growth and to ensure the national energy security.

• Item Type: MPRA Paper
• Language: English
• Keywords: Electricity consumption, economic growth, cointegration, causality, Vietnam
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q40 - General

References

Altinay G, Karagol E. 2005, “Electricity consumption and economic growth: Evidence from Turkey”. Energy Economics, Vol. 27, pp. 849-856

Anderson K.P. 1973, “Residential demand for electricity: Econometrics estimates for California and United States”. Journal of Business, Vol. 46, pp. 526-553

Bohm C.D. 2008, “Electricity consumption and economic growth in the European Union: A causality study using panel unit root test and cointegration analysis”. European Electricity Market, EEM 2008, 5th International Conference

Ciarreta A, Zarrage A. 2007, “Electricity consumption and economic growth: Evidence from Spain”. Biltoki series, No. 1

Ciarreta A, Zarrage A. 2008, “Economic growth and electricity consumption in 12 European countries: A causality analysis using panel data”. Biltoki series, No. 4

Engle R, Granger C. 1987, “Cointegration and error correction: representation, estimation, and testing. Econometrica, Vol. 55, pp. 257-276

General Statistic Office 1990, “10-year Vietnamese economy”. General statistic publishing house: Hanoi

Ghaderi S.F, Azadeh M.A, Mohammadzadeh S. 2006, “Relationship between values added and electricity consumption in the Iranian industries”. Journal of Applied Sciences, Vol. 6, pp. 387-390

Ghosh S. 2002, “Electricity consumption and economic growth in India”. Energy Policy, Vol. 30, pp. 125-129

General Statistics Office 2011, “Statistical Year Book”, Statistics Publishing House, Hanoi

Johansen S, Juselius K. 1990, “Maximum likelihood estimation and inference on cointegration with applications to the demand for money”. Oxford Bulletin of Economics and Statistics, Vol. 52, pp. 169-210

Kraft J, Kraft A. 1978, “On the relationship between energy and GNP”. Journal of Energy Development, Vol. 3, pp. 401-403

Morimoto R, Hope C. 2004, “The impact of electricity supply on economic growth in Sri Lanka. Energy Economics, Vol. 26, pp. 77-85

Mozumder P, Marathe A. 2007, “Causality relationship between electricity consumption and GDP in Bangladesh” Energy Policy, Vol. 35, pp. 395-402

Newbold P, Granger C.W.J. 1974, “Experience with forecasting univariate time series and combination forecast” Journal of the Royal Statistic Society, Vol. 137, pp. 131-146

Shiu A, Lam P.L. 2004, “Electricity consumption and economic growth in China”. Energy Policy, Vol. 32, pp. 47-54

Soytas U, Sari R. 2003, “Energy consumption and GDP: Causality relationship in G-7 countries and emerging markets”. Energy Economics, 25, pp. 33-37

Stern D.I. 1993, “Energy growth in the USA: A multivariate approach” Energy Economics, 15, pp. 137-150

Wolde-Rufael Y. 2006, “Electricity consumption and economic growth: A time series experience for 17 African countries”. Energy Policy, 34, pp. 1106-1114

World Bank 2010, “World Development Indicators CD-ROM”, Washington D.C.

Yoo S.H. 2005, “Electricity consumption and economic growth: Evidence from Korea”. Energy Policy, 33, pp. 1627-1632

Yoo S.H. 2006, “The causal relationship between electricity consumption and economic growth in the ASEAN countries”. Energy Policy, 34, pp. 3573-3582

Yuan J, Zhao C, Yu S, Hu Z. 2007, “Electricity consumption and economics growth in China, Cointegration and co-feature analysis”. Energy Economics, 29, pp. 1179-1191