<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This research study contributes to the ever-expanding literature by examining multivariate cointegration and causality relationships between electricity consumption, economic growth and other growth determinants for quarterly South African data collected between 1994/Q1 – 2014/Q4. The motivation behind this current research case study becomes apparent when taking into consideration that no previous studies have gone further than bivariate and trivariate analysis in investigating the electricity-growth nexus in South Africa. In conducting our empirical investigation, our obtained empirical results are two-fold in nature. Firstly, we find significant multivariate long-run cointegration relationships between economic growth, electricity consumption and other growth determinants. Secondly, our empirical analysis offers support in favour of the neutrality hypothesis, that is, the notion of no causal effects existing between electricity consumption and economic growth in the long-run. However, we find that exports directly cause electricity consumption whereas economic growth, domestic investment and employment levels causally flow to exports.</p></abstract>

This research study contributes to the ever-expanding literature by examining multivariate cointegration and causality relationships between electricity consumption, economic growth and other growth determinants for quarterly South African data collected between 1994/Q1 – 2014/Q4. The motivation behind this current research case study becomes apparent when taking into consideration that no previous studies have gone further than bivariate and trivariate analysis in investigating the electricity-growth nexus in South Africa. In conducting our empirical investigation, our obtained empirical results are two-fold in nature. Firstly, we find significant multivariate long-run cointegration relationships between economic growth, electricity consumption and other growth determinants. Secondly, our empirical analysis offers support in favour of the neutrality hypothesis, that is, the notion of no causal effects existing between electricity consumption and economic growth in the long-run. However, we find that exports directly cause electricity consumption whereas economic growth, domestic investment and employment levels causally flow to exports.

Re-Visting the Electricity-Growth Nexus in South Africa

School of Economics, Faculty of Economic and Management Sciences, North West University (Potchefstroom Campus), South Africa

Department of Applied Chemistry, Faculty of Applied Sciences, National University of Science and Technology (Bulawayo) Zimbabwe

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Re-Visting the Electricity-Growth Nexus in South Africa"}

This research study contributes to the ever-expanding literature by examining multivariate cointegration and causality relationships between electricity...

Re-Visting the Electricity-Growth Nexus in South Africa

Published Online: Jun 29, 2016

Page range: 97 - 111

DOI: https://doi.org/10.1515/sbe-2016-0009

Keywords
Electricity consumption, Economic growth, Co-integration, Granger causality, South Africa

© 2016 Phiri Andrew et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Re-Visting the Electricity-Growth Nexus in South Africa

Published Online: Jun 29, 2016

Page range: 97 - 111

DOI: https://doi.org/10.1515/sbe-2016-0009

KeywordsElectricity consumption, Economic growth, Co-integration, Granger causality, South Africa

© 2016 Phiri Andrew et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Electricity consumption, Economic growth, Co-integration, Granger causality, South Africa