Renewable and non-renewable energy consumption-economic growth nexus: New evidence from South Asia

摘要

This study explores the relationship between renewable and non-renewable energy consumption and economic growth for a panel of five South Asian countries over the period of 1990-2014. To see the longrun co-integration between the variables, the study applies Pedroni (1999, 2004) and Kao (1999) tests. The long-run equilibrium relationship is determined using panel Fully Modified Ordinary Least Squares and panel Dynamic Ordinary Least Squares estimation techniques. Dumitrescue-Hurlin (2012) panel causality test is used to see the causal links between the variables. The study finds positive impacts of renewable and non-renewable energy consumption and fixed capital formation on economic growth. Ceteris paribus, a 1% increase in renewable energy consumption, non-renewable energy consumption and capital increased economic growth by 0.66%. 0.10% and 0.58%, respectively. It is also revealed that there is a unidirectional causality running from economic growth to renewable energy consumption. As per the obtained results, the conservation hypothesis is valid for the South Asian countries. (C) 2019 Elsevier Ltd. All rights reserved.