1. bookVolume 16 (2021): Issue 2 (August 2021)
Journal Details
License
Format
Journal
eISSN
2344-5416
First Published
06 Mar 2015
Publication timeframe
3 times per year
Languages
English
access type Open Access

Determinants of Energy Consumption in Egypt: The Wavelet Coherence Approach

Published Online: 27 Sep 2021
Page range: 186 - 205
Journal Details
License
Format
Journal
eISSN
2344-5416
First Published
06 Mar 2015
Publication timeframe
3 times per year
Languages
English
Abstract

Several studies have examined the implications of different macroeconomics variables on energy consumption, but the findings have been mixed, in addition, the study in the context of Egypt have been scant in the literature. Thus, our study investigates economic growth, gross capital formation, urbanization, and import as the determinants of energy consumption in Egypt using a time series from 1971 to 2017, and employed a wavelet coherent technique for the analysis. This study demonstrates a positive correlation between energy consumption and urbanization at different scales, as well as revealing a bidirectional causal relationship between the two variables. Moreover, this study shows a positive correlation between energy consumption and import, and also revealed import as a significant determinant of energy consumption at different frequencies in Egypt. In addition, an evidence of bidirectional causality was found between economic growth and energy consumption, while gross capital formation was also found to cause energy consumption in Egypt during the period of study. Our findings provide empirical rationale for the initiations by the policymakers in Egypt towards formulating policies that will ensure sustainable energy consumption in the country.

Keywords

Aali-Bujari, A., Venegas-Martínez, F., & Palafox-Roca, O. (2017). Impact of energy consumption on economic growth in major OECD economies (1977-2014): A panel data approach. International Journal of Energy Economics and Policy, 7(2). Search in Google Scholar

Aboagye, S., & Nketiah-Amponsah, E. (2016). The implication of economic growth industrialization and urbanization on energy intensity in Sub-Saharan Africa. Journal of Applied Economics & Business Research, 6(4). Search in Google Scholar

Adebayo, T. S. (2020a). Dynamic Relationship between Oil Price and Inflation in Oil Exporting Economy: Empirical Evidence from Wavelet Coherence Technique. Energy Economics Letters, 7(1), 12-22.10.18488/journal.82.2020.71.12.22 Search in Google Scholar

Adebayo, T. S., & Beton Kalmaz, D. (2020). Ongoing Debate Between Foreign Aid and Economic Growth in Nigeria: A Wavelet Analysis. Social Science Quarterly.10.1111/ssqu.12841 Search in Google Scholar

Adebayo, T. S., Awosusi, A. A., & Adeshola, I. (2020). Determinants of C02 Emissions in Emerging Markets: An Empirical Evidence from MINT Economies. Int. Journal of Renewable Energy Development, 9(3), 411-422.10.14710/ijred.2020.31321 Search in Google Scholar

Adebayo, T. S. (2020b). New Insights into Export-growth Nexus: Wavelet and Causality Approaches. Asian Journal of Economics, Business and Accounting, 32-44.10.9734/ajeba/2020/v15i230212 Search in Google Scholar

Adorn P, Kwakwa PA (2014). Effects of changing trade structure and technical characteristics of the manufacturing sector on energy intensity in Ghana. Renewable Sustainable Energy Review, 35:475—48310.1016/j.rser.2014.04.014 Search in Google Scholar

Adorn PK (2015). Determinants of energy intensity in South Africa: testing for structural effects in parameters. Energy, 89(September): 334-346. Search in Google Scholar

Akoena S., Agyire-Tettey, Mawutor G., (2007). Energy consumption and economic growth: evidence from Ghana. West Africa Journal of Monetary and Economic Integration, 7, 91-119. Search in Google Scholar

Alola, A. A., & Kirikkaleli, D. (2019). The nexus of environmental quality with renewable consumption, immigration, and healthcare in the US: wavelet and gradual-shift causality approaches. Environmental Science and Pollution Research, 26(34), 35208-35217.10.1007/s11356-019-06522-y Search in Google Scholar

Al-mulali, U.; Sab, C.N.B.C.; Fereidouni, H.G. (2012). Exploring the bi-directional long run relationship between urbanization, energy consumption, and carbon dioxide emission. Energy, 46, 156-167.10.1016/j.energy.2012.08.043 Search in Google Scholar

Ang, J.B., (2007). C02 emissions, energy consumption, and output in France. Energy Policy, 35, 4772—4778.10.1016/j.enpol.2007.03.032 Search in Google Scholar

Apergis, N., Payne, J.E., (2010). The emissions, energy consumption and growth nexus: evidence from the Commonwealth of Independent States. Energy Policy, 38, 650-655.10.1016/j.enpol.2009.08.029 Search in Google Scholar

Apergis, N., & Danuletiu, D. (2012). Energy consumption and growth in Romania: Evidence from a panel error correction model. International Journal of Energy Economics and Policy, 2(4), 348. Search in Google Scholar

Aqeel, A., & Butt, M. S. (2001). The relationship between energy consumption and economic growth in Pakistan. Asia-Pacific Development Journal, 8(2), 101-110. Search in Google Scholar

Arouri, M.E., Youssef, A., M’henni, H., Rault, C., (2012). Energy consumption, economic growth and CO2 emissions in Middle East and North African countries. Energy Policy, 45, 342-349.10.1016/j.enpol.2012.02.042 Search in Google Scholar

Azam, M., Khan, A. Q., Bakhtyar, B., & Emirullah, C. (2015). The causal relationship between energy consumption and economic growth in the ASEAN-5 countries. Renewable and Sustainable Energy Reviews, 47, 732-745.10.1016/j.rser.2015.03.023 Search in Google Scholar

Balsalobre-Lorente, D., Shahbaz, M., Roubaud, D., & Farhani, S. (2018). How economic growth, renewable electricity and natural resources contribute to C02 emissions?. Energy Policy, 113, 356-367.10.1016/j.enpol.2017.10.050 Search in Google Scholar

Bartleet, M., Gounder, R., (2010). Energy consumption and economic growth in New Zealand: results of trivariate and multivariate models. Energy Policy, 38, 3505-3517.10.1016/j.enpol.2010.02.025 Search in Google Scholar

Belloumi, M., & Alshehry, A. S. (2016). The impact of urbanization on energy intensity in Saudi Arabia. Sustainability, 8(4), 375.10.3390/su8040375 Search in Google Scholar

Bernard AB, Durlauf SN (1995) Convergence in international output. Journal of Applied Economics, 10(2):97-108. Search in Google Scholar

Blanchard О (1992) Energy consumption and modes of industrialization four developing countries. Energy Policy, 20:1174-118510.1016/0301-4215(92)90096-K Search in Google Scholar

BP 2019 Statistical Review of World Energy, historical database, accessed 08/23/2020, https://www.bp.com/en/qlobal/corporate/enerqy-economics/statistical-review-of-world-enerqy.html. Search in Google Scholar

Bulut, U., & Durusu-Ciftci, D. (2018). Revisiting energy intensity convergence: new evidence from OECD countries. Environmental Science and Pollution Research, 25(13), 12391-12397.10.1007/s11356-018-1551-z Search in Google Scholar

Dedeoglu, D., & Piskin, A. (2014). A dynamic panel study of energy consumption-economic growth nexus: evidence from the former Soviet Union countries. OPEC Energy Review, 38(1), 75-106.10.1111/opec.12017 Search in Google Scholar

Halicioglu, F., (2007). Residential electricity demand dynamics in Turkey. Energy Economics, 29 (2), 199-210.10.1016/j.eneco.2006.11.007 Search in Google Scholar

Halicioglu, F., (2009). An econometric study of C02 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy, 37, 1156-1164.10.1016/j.enpol.2008.11.012 Search in Google Scholar

Hu. Y, Guo. D, Wang. M, Zhang. X, Wang. S, (2015). The relationship between energy consumption and economic growth: Evidence from China's industrial sectors, Energies, Vol. 8, pp. 9392-9406. Search in Google Scholar

Huang, B., Hwang, M.J., Yang, C.W., (2008). Causal relationship between energy consumption and GDP growth revisited: a dynamic panel data approach. Ecology Economics, 67, 41-54.10.1016/j.ecolecon.2007.11.006 Search in Google Scholar

Hundie, S. K., & Daksa, M. D. (2019). Does energy-environmental Kuznets curve hold for Ethiopia? The relationship between energy intensity and economic growth. Journal of Economic Structures, 8(1), 21.10.1186/s40008-019-0154-2 Search in Google Scholar

Kan, D.X.; Luo, L.W. (2010). The Impact of China’s Urbanization on Energy Intensity: Based on A Space Econometric Analysis. Contemporary Financial Economics, 3, 83-88. Search in Google Scholar

Kasprowicz. R, (2014). Economic growth and energy consumption in 12 European countries: a panel data approach, Journal of International Studies, Vol. 7, No. 3, pp. 112-122. Search in Google Scholar

Kalmaz, D. B., & Kirikkaleli, D. (2019). Modeling CO 2 emissions in an emerging market: empirical finding from ARDL-based bounds and wavelet coherence approaches. Environmental Science and Pollution Research, 26(5), 5210-5220.10.1007/s11356-018-3920-z Search in Google Scholar

Katircioglu, S. T. (2013). Interactions between energy and imports in Singapore: empirical evidence from conditional error correction models. Energy Policy, 63, 514-520.10.1016/j.enpol.2013.08.037 Search in Google Scholar

Katircioglu, S., Katircioğlu, S., & Altinay, M. (2017). Interactions between energy consumption and imports: empirical evidence from Turkey. Journal of Comparative Asian Development, 16(2), 161-178.10.1080/15339114.2017.1319285 Search in Google Scholar

Kirikkaleli, D., Adedoyin, F. F., & Bekun, F. V. (2020). Nuclear energy consumption and economic growth in the UK: Evidence from wavelet coherence approach. Journal of Public Affairs, e2130. Search in Google Scholar

Kirikkaleli, D., & Gokmenoglu, К. K. (2020). Sovereign credit risk and economic risk in Turkey: Empirical evidence from a wavelet coherence approach. Borsa Istanbul Review, 20(2), 144-152.10.1016/j.bir.2019.06.003 Search in Google Scholar

Li, K., & Lin, B. (2015). Impacts of urbanization and industrialization on energy consumption/C02 emissions: does the level of development matter?. Renewable and Sustainable Energy Reviews, 52, 1107-1122.10.1016/j.rser.2015.07.185 Search in Google Scholar

Li, M., Li, L., & Strielkowski, W. (2019). The impact of urbanization and industrialization on energy security: A case study of China. Energies, 72(11), 2194.10.3390/en12112194 Search in Google Scholar

Liu, Y.B. (2009). Exploring the Relationship between Urbanization and Energy Consumption in China Using ARDL (Autoregressive Distributed Lag) and FDM (Factor Decomposition Model). Energy, 34, 1846-185410.1016/j.energy.2009.07.029 Search in Google Scholar

Menyah, K., Rufael, Y., (2010). Energy consumption, pollutant emissions and economic growth in South Africa. Energy Economics, 32, 1374-1382.10.1016/j.eneco.2010.08.002 Search in Google Scholar

Odugbesan, J. A., & Rjoub, H. (2020). Relationship Among Economic Growth, Energy Consumption, C02 Emission, and Urbanization: Evidence From MINT Countries. SAGE Open, 70(2), 2158244020914648. Search in Google Scholar

Onyibor, K., Bah, S. I., & Tomiwa, A. (2018). Aid-Growth Relationship: Evidence From a Cointegration Analysis for the Five Poorest Countries of the World. LAU Sosyal Bilimler Dergisi, 9(2), 121-137. Search in Google Scholar

Sahir, M.H., Qureshi, A.H., (2007). Specific concerns of Pakistan in the context of energy security issues and geopolitics of the region. Energy Policy, 35, 2031-2037.10.1016/j.enpol.2006.08.010 Search in Google Scholar

Saidi, K., & Hammami, S. (2015). The impact ofC02 emissions and economic growth on energy consumption in 58 countries. Energy Reports, 7, 62-70.10.1016/j.egyr.2015.01.003 Search in Google Scholar

Solarin, S. A., & Shahbaz, M. (2013). Trivariate causality between economic growth, urbanisation and electricity consumption in Angola: Cointegration and causality analysis. Energy policy, 60, 876-884.10.1016/j.enpol.2013.05.058 Search in Google Scholar

Sunde, T. (2020). Energy consumption and economic growth modelling in SADC countries: an application of the VAR Granger causality analysis. International Journal of Energy Technology and Policy, 76(1), 41-56.10.1504/IJETP.2020.103846 Search in Google Scholar

Nguyen, H. M., & Ngoc, В. H. (2020). Energy Consumption-Economic Growth Nexus in Vietnam: An ARDL Approach with a Structural Break. Journal of Asian Finance, Economics and Business, 7(1), 101-110.10.13106/jafeb.2020.vol7.no1.101 Search in Google Scholar

Sarwar, S., Chen, W., & Waheed, R. (2017). Electricity consumption, oil price and economic growth: Global perspective. Renewable and Sustainable Energy Reviews, 76, 9-18.10.1016/j.rser.2017.03.063 Search in Google Scholar

Stjepanović, S. (2018). Relationship between energy consumption and economic growth in 30 countries in Europe-panel. Ekonomski pregled, 69(1), 43-57.10.32910/ep.69.1.3 Search in Google Scholar

Topcu, E., Altinoz, B., & Aslan, A. (2020). Global evidence from the link between economic growth, natural resources, energy consumption, and gross capital formation. Resources Policy, 66, 10162210.1016/j.resourpol.2020.101622 Search in Google Scholar

U.S Energy Information Administration, (2018). Country Analysis Brief: Egypt. Accessed 08/23/2020. http://www.iberqlobal.com/files/2018/eqiptoeia.pdf Search in Google Scholar

U.S. Energy Information and Administration (EIA) (2016) International energy outlook 2016: with projections to 2040. https://www.eia.gov/outlooks/ieo/pdf/0484(2016).pdf Search in Google Scholar

Ucan. O, Aricioglu. E, Yucel. F, (2014). Energy consumption and economic growth nexus: Evidence from developed countries in Europe, International Journal of Energy and Policy, Vol.4, No.3, 2014, pp. 411-419. Search in Google Scholar

van Ruijven B, Urban F, Benders RMJ, Moll HC, van der Sluijs JP, de Vries B, van Vuuren DP (2008) Modeling energy and development: an evaluation of models and concepts. World Development, 36(12):2801-2821.10.1016/j.worlddev.2008.01.011 Search in Google Scholar

Wang, L., & Wei, H. (2014). The impacts of Chinese urbanization on energy consumption. Resources Science, 36(6), 1235-1243. Search in Google Scholar

Wei, B. R., Yagita, H., Inaba, A., & Sagisaka, M. (2003). Urbanization impact on energy demand and C02 emission in China. Journal of Chongqing University-Eng. Ed, 2, 46-50. Search in Google Scholar

Yıldırım, E., Sukruoglu, D., & Aslan, A. (2014). Energy consumption and economic growth in the next 11 countries: The bootstrapped autoregressive metric causality approach. Energy Economics, 44, 14-21.10.1016/j.eneco.2014.03.010 Search in Google Scholar

Zaleski, P., 2001. Energy and geopolitical issues. In: Rao, D.B., Harshyita, D. (Eds.), Energy Security. Discovery Publishing House, New Delhi. Search in Google Scholar

Zhou, X., Sha, J., & Zhong, S. (2015, July). Measuring the impacts of urbanization on energy consumption and economic growth in China: A computable general equilibrium analysis. In 2015 3rd International Conference on Advances in Energy and Environmental Science. Atlantis Press.10.2991/icaees-15.2015.150 Search in Google Scholar

Recommended articles from Trend MD

Plan your remote conference with Sciendo