Top PDF An analysis of biomass consumption and economic growth in transition countries

An analysis of biomass consumption and economic growth in transition countries

An analysis of biomass consumption and economic growth in transition countries

Biomass energy consumption is a significant part of energy consumption and is as old as humanity. However, traditional biomass energy consumption is not commonly used around the world because it has not met energy needs of the economy in recent years. As the economy has developed, fossil energy has gained popularity and traditional biomass energy consumption has diminished. Because of rapid urbanisation, traditional usage of biomass energy has lost its popularity. Further, because of problems such as environmental pollution, limited fossil reserves, increased oil prices and the Chernobyl disaster caused by fossil energy, worldwide interest has steered away from fossil energy sources such as coal, oil and natural gas to renewable energy resources like biomass, geothermal, solar power,
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Does tourism development promote economic growth in transition countries? A panel data analysis

Does tourism development promote economic growth in transition countries? A panel data analysis

In detecting causal linkage between tourism spending and economic growth, we utilize the panel causality approach instead of the time series method, since panel data sets include information not only from the time series dimension but also the cross-section dimension. Based on this advantage of panel data analysis, non-stationary panel tests (unit root, cointegration and causality) have become a more powerful econometric methodology in recent years. Our recent experience with economic dynamics shows that turbulence in a country may easily be transmitted to other countries through international trade and eco- nomic and financial integration, which are basic features among these transition countries. This demonstrates the importance of taking into account cross-section dependency in empirical analysis. Even though
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Do efficient banking sectors accelerate economic growth in transition countries

Do efficient banking sectors accelerate economic growth in transition countries

A number of studies empirically analyse the relationship between financial sector devel- opment and economic growth (Levine 1997, Thiel 2001, Wachtel 2001). Goldsmith’s work (1969) provides the earliest evidence that development of financing accelerates economic growth. However, the measure (deposits to GDP) used for financial sector development was highly simplified and the direction of causality was never assessed. King and Levine (1993) study cross-country data for 80 countries. They measured financial sector develop- ment with four indicators: the amount of liquid liabilities divided by GDP, the importance of commercial banks in relation to central bank when allocating credit, the ratio of credit allocated to private enterprises to total domestic credit, and credit to private sector divided by GDP. After controlling for other factors affecting economic growth, King and Levine find a strong positive relation between each of the financial development indicators and economic growth. Using cross-country analysis, Levine and Zervos (1996, 1998) research the role of stock markets and the banking sector. They conclude that stock market liquidity and bank development robustly correlate with economic growth.
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Economic Growth and Electricity Consumption in 12 European Countries: A Causality Analysis Using Panel Data

Economic Growth and Electricity Consumption in 12 European Countries: A Causality Analysis Using Panel Data

We should consider two aspects. On the one hand, as pointed out above, the IPS test allows for heterogeneity across cross-section units in the autore- gressive term, which is a more reasonable assumption when using crossed countries. Also, Im et al. (2003) show that under serial correlation and het- erogeneity in the underlying data generation process, if the selected order of the underlying ADF regressions is large enough, the IPS test is more power- ful than the LLC. On the other hand, the characteristics of the series make it reasonable to include a time trend in the ADF regressions. In fact, both real GDP and electricity consumption exhibit a persistent upward trend for all countries in the panel and have increased over time, as can be seen in Table 2.
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Oil and Growth in Transition Countries

Oil and Growth in Transition Countries

However, it is also important to note that the strong positive growth effects found so far in the transition economies of the FSU and CEE need not neces- sarily hold in the future, as well. A necessary provision for continued strong growth performance is the wise investment of oil revenues not only into the oil sector itself (in order to maintain and possibly enlarge production and distri- bution throughout the estimated extraction period), but also into other sectors of the economy (in the sense of long-term economic diversification). This pro- vision may not be met in all countries under analysis. For example, there are signs that Russia’s economy is worryingly biased towards the oil and gas sector, while at the same time not enough new investment is being undertaken to se- cure future production. This combination bodes ill for long-term development in the region’s largest economy.
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A Multivariate Causality Analysis of Economic Growth and Electricity Consumption in Turkey

A Multivariate Causality Analysis of Economic Growth and Electricity Consumption in Turkey

Given the fact that bivariate models are employed in these studies, the studies may lose important variable(s) and obtain biased results. Therefore, some of the studies investigate electricity consumption-growth nexus by adopting multivariate causality analysis to prevent the omitted variable bias. For instance, Ozturk (2010) provided a survey of the literature to show the relationship between energy consumption and economic growth; electricity consumption and economic growth causality nexus. There are some other researchers who have highlighted this relation (see (Iwata, 2010; Wang, 2011)). Shahbaz (2014) studied the interrelationship among FDI, electricity consumption, and CO2 in Bangladesh. Hamdi (2014) employed the ARDL and VECM models to investigate the relationship between economic growth, foreign direct investment (FDI), and electricity consumption in Bahrain. Their result suggested unidirectional causal relationships run from FDI and electricity consumption to economic growth. Their result found that FDI and trade openness have a positive impact on energy pollutants. However, different researches have utilized time series models and Granger causality analysis to test the relationship between electricity consumption (ELC) and economic growth in different countries. Some studies have been based on the VAR model (e.g., (Yang, 2000; Aqueel, 2001; Ghosh, 2002; Yoo, 2006; Huang, 2008)). In addition, several studies have been used the VEC model (see, (Bekhet and Othman, 2001; Jumbe, 2004; Shiu and Lam, 2004; Chen, 2007; Yuan, 2008; Narayan and Smyth, 2009; Yoo and Kwak, 2010; Odhiambo, 2011; Lee and Chang, 2008)). The following group of studies has employed the ARDL model, for instance, Fatai (2004); Squalli (2007); Ouédraogo (2010); Narayan and Smyth (2009); Narayan and Smyth (2007); Tang (2009).
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The nexus between economic freedom and growth: Evidence from CEE countries in transition

The nexus between economic freedom and growth: Evidence from CEE countries in transition

Aixala and Fabro (2009) studied the causal relations between institutional dimensions (economic freedom, civil liberties and political rights) and economic growth, using Granger methodology with panel data for 187 countries and five-yearly observations for the period 1976-2000. From the analysis of the indirect channels through which freedom may affect growth, the authors draw two main conclusions. Firstly, the level of investment in physical capital is determined by the levels and changes in economic freedom (the relationship is bilateral in the case of levels). Secondly, the three dimensions of institutional quality analyzed exhibit bilateral causality with investment in human capital (also in levels). With respect to the interrelations between institutional variables, both civil liberties and political rights cause economic freedom. Furthermore, in the case of political rights the direction of causality is bilateral. It can be observed that in almost all cases the causal relationships emerge in the short and medium run (for five or ten years), and disappear in the long term. In addition, the results confirm the theoretical argument about the existence of a virtuous circle, i.e. economic freedom generates growth and the latter supports the expansion of civil liberties, which, in turn, support economic freedom.
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Renewable Energy Consumption and Economic Growth in Member of OIC Countries

Renewable Energy Consumption and Economic Growth in Member of OIC Countries

Developing or less developed countries affected more than developed ones by the climate change. It is widely believed that whenever there is climatic abnormality, the countries have fewer resources face more difficulty because of poorer people. In developed economies the pollution reduction efforts overcome the scale effect because growth rate is lower of developed countries. Bradford et al. (2000) confirms that most of the developed countries are at the upper part of EKC while most developing countries are below the turning point of the EKC. In developed countries, economic growth affects the environment degradation, but this effect is irretrievable and thus the environmental degradation cannot restore the initial environment situation. The relationship between pollution and income also depend upon the capacity of integration and the stock of environment of each country. According to Stern et al. (1996), the historical experience of the individual country regarding relationship between environment and economic growth is more useful by using econometric and also qualitative historical analysis. Liddle (2001) pointed out that increase in income lead to strictness in the environmental regulation, therefore more energy efficient technologies were adopted in order to save the environment from degradation.
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Information and communication technology, electricity consumption and economic growth in OECD countries: a panel data analysis

Information and communication technology, electricity consumption and economic growth in OECD countries: a panel data analysis

Apergis and Payne (2011) undertake a study using a multivariate panel of 88 countries categorized into four panels based on the World Bank income classifications (i.e. high, upper-middle, lower- middle and low income) over the period of 1990-2006. The results reveal long-run equilibrium relationship between real GDP, coal consumption, real gross fixed capital formation and the labor force for the high, upper-middle and lower-middle income country panels. They also find bi- directional causal relationship for high-income and the upper middle-income country panels in both the short- and the long-run. Their findings further indicate unidirectional causal link in the short-run and bi-directional causal link for the lower middle-income country panel and unidirectional causality from electricity consumption to economic growth for the low-income country panel.
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Energy Consumption and Economic Growth: Evidence from COMESA Countries

Energy Consumption and Economic Growth: Evidence from COMESA Countries

Although nature has endowed sub-Saharan Africa with an array of natural energy resources such as wind, coal, water, oil, wood and solar, a large number of these resources have remained unexploited for decades. Consequently, many African countries face serious energy deficits due to poor investment in energy infrastructure. The inadequate provision of energy services in Sub-Saharan Africa has been cited by the United Nations Economic Commission for Africa (UNECA, 2004) as a limiting factor to economic growth and poverty alleviation efforts. Predominantly, the rural population and the urban poor are the ones who do not have access to modern energy services; a situation which has resulted in majority of the population to live on less than $1 a day (GNESD, 2007). In order to meet daily energy needs, majority of the population relies on traditional biomass sources such as wood, agricultural residues, and other primitive energy sources and thus exacerbating the problems of environmental and land degradation.
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Two deficits and economic growth: Case of CEE countries in transition

Two deficits and economic growth: Case of CEE countries in transition

Budget deficit can also lead to higher taxes. Government may be forced to raise taxes in order to cope with growing costs of public debt. Higher taxes hamper private consumption, enhance growth of grey economy and discourage the individuals to work and do business. Therefore, higher taxes reduce the rate of economic growth. The costs of servicing the public debt are paid by a society (taxes). If a country has a foreign debt then the abroad receives the part of the domestic income. If debt is financed by citizens then natives receive the part of national income. Usually the treasury bonds are held by wealthy people. However, also the poor pay taxes. In this way public debt (due to budget deficit and taxes) is a cause of income redistribution from poor to rich. In other words, the budget deficits and public debt are the reasons of income redistribution between generations. Budget deficit used to finance the future economic development is usually advantageous for future generations. However, if budget deficit finances mostly the current consumption, then one can say that the current generation lives on the cost of future generations. Most of CEE countries had and still has troubles with budget deficits. These troubles have been observed from the very beginning of the transition process and caused mostly by constantly lowering the taxes and growing the social expenditures.
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Estimating the Size and Growth of Unrecorded Economic Activity in Transition Countries: A Re-evaluation of Electric Consumption Method Estimates and their Implications

Estimating the Size and Growth of Unrecorded Economic Activity in Transition Countries: A Re-evaluation of Electric Consumption Method Estimates and their Implications

It is widely acknowledged that underground (unrecorded) economic activities play a major role in transition economies. Evaluations of the success and failure of the transition experience should therefore be based on total economic activity [TEA], namely, the sum of recorded and unrecorded economic activity. Substantive conclusions concerning the effects of unrecorded activities on the transition process as well as investigations of the causes and consequences of unrecorded activities have to date, relied extensively on estimates of unrecorded income based on variants of the electric consumption method [ECM] during the first half of the transition process. We first attempt to replicate these estimates employing improved data series. We then go on to extend and update alternative versions of the ECM estimates of unrecorded income for twenty five transition countries for the period 1989-2001. These new estimates enable us to examine the sensitivity of the results to alternative specifying assumptions, particularly, initial conditions. We find that our updated ECM estimates of the size of the unrecorded sector are not only highly sensitive to initial conditions, but they produce negative estimates of unrecorded income for many transition countries. Our findings are also compared to the new national accounting procedures that attempt to estimate exhaustive measures of the “non-observed economy”. Our disturbing results call into question many of the substantive conclusions reached by other scholars who relied on earlier ECM estimates to draw inferences about the transition process as well as the causes and consequences of underground economies in transition. In short, while we conclude that ECM estimates of the size of the unrecorded economy are unreliable, it is still possible to use the growth rate of the unrecorded sector to make important inferences about the transition process by examining the dynamic relationship between recorded and unrecorded sectors. The extension of our data base to cover the entire transition period will hopefully result in new investigations employing panel data rather than the more traditional method of applying simple cross country test procedures.
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An Investigation of the Relationship between the Biomass Energy Consumption, Economic Growth and Oil Prices

An Investigation of the Relationship between the Biomass Energy Consumption, Economic Growth and Oil Prices

Regarding magnitudes of cross price elasticities in the short-run, the results are also given in Table 3, where the short-run regression results and the ECM mechanisms are reported. The results for the majority of the countries satisfy the ECM conditions, i.e. possessing negative signs and are less than 1. For Italy, there is an exception: though the ECM parameters are significantly positive, suggesting deviations from the long-run equilibrium. Further, the majority of the short-run elasticities are statistically significant at 5% significance levels. BMC has negative impact on the Y for Germany, France and Italy and bmc has positive impact in Canada’s Y. For all of the countries, where the bmc is taken as the dependent variable, the Y growth rates have significant impacts. For Austria, Finland and Canada, the impact of Y growth rates on bmc consumption growth rates are significantly positive; whereas, for Portugal, USA, Mexico and GB, the impact of Y growth rates on bmc consumption growth rates are negative. Oil price growth rates have positive impacts on biomass consumption growth rates in the short-run for the countries, for which the biomass consumption is taken as the dependent variable. The results are as expected since the oil price increases are expected to increase the tendency towards biomass production and therefore, towards the bmc consumption.
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The nexus between electricity consumption and economic growth in MENA countries

The nexus between electricity consumption and economic growth in MENA countries

With the exception of the studies by Mahadevan and Asafu (2007) and Arouri et al. (2012), the previous studies pertaining to MENA countries evaluated the linkage between energy consumption and economic growth in a bivariate framework. Accordingly, Ozturk and Acaravci (2011) investigate the dynamic linkage between energy consumption and growth rate in selected MENA countries using cointegration analysis developed by Pesaran and Shin (1999), and Granger causality test. The cointegration test results show that there is no cointegration and causal relationship between the electricity consumption and the economic growth in Iran, Morocco and Syria. However, the cointegration and causal relationship is found for the rest of selected countries, i.e. Egypt, Israel, Oman and Saudi Arabia. Intuitively, they argue that the energy conservation policy of MENA countries can have a no powerful impact on economic growth.
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ENERGY CONSUMPTION AND ECONOMIC GROWTH:

ENERGY CONSUMPTION AND ECONOMIC GROWTH:

Mustafa Balat (2007) shed light on the importance of energy consumption. He views that in developing countries energy cosumption has been increased. Turkish goverment is encouraging national and international investors to invest in energy projects. He says energy sector needs more investment for the progress of the country. He thinks wind and solar energy as an alternative sources. Olusegun (2009) thinks energy as a bone for economic growth. He finds positive relationship between energy consumption and economic growth in Nigeria. Greater energy consumption means more economic activity of the nation and as a result higher economic growth. He suggests this sector should be given attention for the development of the country. Galip Altiny (2005) analysis the relation between electricity consumption and real GDP of Turkey for the period of 1950- 2000. The author finds uni-directional causality running from electricity consumption to income. He says that electric supply is necessary for economic growth.
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The nexus between electricity consumption and economic growth in MENA countries

The nexus between electricity consumption and economic growth in MENA countries

With the exception of the studies by Mahadevan and Asafu (2007) and Arouri et al. (2012), the previous studies pertaining to MENA countries evaluated the linkage between energy consumption and economic growth in a bivariate framework. Accordingly, Ozturk and Acaravci (2011) investigate the dynamic linkage between energy consumption and growth rate in selected MENA countries using cointegration analysis developed by Pesaran and Shin (1999), and Granger causality test. The cointegration test results show that there is no cointegration and causal relationship between the electricity consumption and the economic growth in Iran, Morocco and Syria. However, the cointegration and causal relationship is found for the rest of selected countries, i.e. Egypt, Israel, Oman and Saudi Arabia. Intuitively, they argue that the energy conservation policy of MENA countries can have a no powerful impact on economic growth.
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Energy Consumption and Economic Growth Revisited in African Countries

Energy Consumption and Economic Growth Revisited in African Countries

The aim of this study was to shed light on the relationship between energy consumption, economic growth and auxiliaries’ variables for 21 African countries over the period from 1970 to 2006. We have made use of recent panel unit root tests, Pedroni (1999) and Westerlund (2006, 2007) panel cointegration and causality tests to analyse the nexus between energy consumption and economic growth. Since African countries react in different ways to energy shock, the sample is divided into two groups: net energy importers and net energy exporters. Our results reveal that there is a long-run equilibrium relationship between real GDP, energy consumption, consumer price index, labor and capital. Moreover, we find that decreasing energy consumption decreases growth and vice versa, and that increasing energy consumption increases growth, and vice versa, and that this applies for both energy exporters and importers. This result is robust to possible cross-country dependence and still holds when allowing for multiple endogenous structural breaks, which can differ among countries. Note however that a possible limitation of our analysis is related to the specific panel causality results for all 21 countries taken together for which the long-run coefficients cannot actually be considered as being the same for all countries. This may explain why some of our results for this panel differ to those of other authors.
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Modeling Economic Growth and Energy Consumption in Arab Countries: Cointegration and Causality Analysis

Modeling Economic Growth and Energy Consumption in Arab Countries: Cointegration and Causality Analysis

Sarkar and Singh (2010) also showed that energy efficiency programs can conserve natural resources, reduce the environmental pollution and carbon footprint of the energy sector, reduce a country’s dependence on fossil fuels, thus enhancing its energy security, ease infrastructure bottlenecks and impacts of temporary power shortfalls, as well as improve industrial and commercial competitiveness through reduced operating costs. Using monthly data for Lebanon, Abosedra, et al. (2009) investigated the causal relationship between electricity consumption and economic growth for Lebanon, Empirical results of the study confirm the absence of a long-term equilibrium relationship between electricity consumption and economic growth but the existence of unidirectional causality running from electricity consumption to economic growth. Belloumi (2009) used Johansen cointegration technique to examine the causal relationship between per capita energy consumption and per capita gross domestic product for Tunisia during 1971–2004. Estimation results indicate that the economic growth and electricity consumption are related by one cointegrating vector and that there is a long-run bi-directional causal relationship between the two series and a short-run unidirectional causality from energy to GDP.
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Energy Consumption and Economic Growth in Pakistan: A Sectoral Analysis

Energy Consumption and Economic Growth in Pakistan: A Sectoral Analysis

Wolde & Rufael (2009) re-considering the causal connection between energy consumption and economic growth for seventeen African countries. This study used annual data for the period ranging from 1971 to 2004 and Granger causality and Variance decomposition analysis were applied for estimation. The results showed that there is unidirectional causality runs from either energy consumption to economic growth or from economic growth to energy consumption in few countries of the sample. In few countries, bidirectional causality was found and in one county no causality was found. The current energy infrastructure in almost all African countries is insufficient to maintain economic development so that economic growth can be increased. Apergis & Payne (2009) analyzed the correlation of energy consumption with economic growth in 11 countries of the Commonwealth of Independent States. Authors used annual data from 1991 to 2005 and fully modified OLS and panel vector error correction were employed for estimation. The results supported the feedback hypothesis which asserts that energy policies improve the efficiency in the production and consumption of energy might have no effect on economic growth, but may also enhance environmental quality.
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Woody biomass energy consumption and economic growth in Sub-Saharan Africa

Woody biomass energy consumption and economic growth in Sub-Saharan Africa

Accessing to energy, especially for renewable energy is so crucial for Africa which is in the tendency to sustained economic growth and has positive trends in human development indicators. Thus, bio-energy has a strategic role in the country’s development. Bio-energy is currently the primary energy source for almost 2.7 billion people worldwide (Wicke, et.al. 2011; Stecker et.al. 2013), playing a traditional role in Africa by composing nearly 90% of total energy supply especially in Sub-Saharan Africa. Although the International Energy Agency (IEA) expects to decrease in total energy rate of biomass and wastes by 2035, it is predicted that biomass energy will still have substantial effect on the country’s energy consumption (IEA, 2010; Stecker et.al. 2013). As well as the total primary energy demand, biomass and wastes have major share of total energy consumption of Africa. According to IEA’s estimations, biomass and wastes will have share between 51% and 57% in Africa’s total energy consumption by 2035. However, dependence on biomass energy varies across regions of Africa. For instance, African countries suffered from poverty have high biomass ratios in total energy, especially for woody biomass. In some countries such as Burundi, Rwanda and the Central African Republic, biomass energy utilization is 90% or greater (Dasappa, 2011; Stecker et.al. 2013). In Sub-Saharan Africa (SSA), people heavily rely on “traditional biomass energy” especially for cooking, lighting and heating considered other regions (Eleri and Eleri, 2009; Stecker et.al. 2013). In Africa, almost 80% of the population utilized from traditional biomass energy particularly for cooking. Therefore, renewable energy sources, especially woody biomass resources, have vital role in Africa so they should be used effectively (Stecker et.al. 2013).
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