Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in Pakistan
This paper attempts to investigate the dynamic relationship among Energy Consumption (E), Financial System Development (F), Industrailization (I), Agriculture Development (A) and Economic Growth (Y) in case of Pakistan for the period 1971-2018 by using cointegration approach. After confirming the l...
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| Format: | Article |
| Language: | English |
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EconJournals
2022-05-01
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| Series: | International Journal of Energy Economics and Policy |
| Subjects: | |
| Online Access: | https://econjournals.com/index.php/ijeep/article/view/12930 |
| _version_ | 1828018141791256576 |
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| author | Sohail Amjed Iqtidar Ali Shah Adnan Riaz |
| author_facet | Sohail Amjed Iqtidar Ali Shah Adnan Riaz |
| author_sort | Sohail Amjed |
| collection | DOAJ |
| description |
This paper attempts to investigate the dynamic relationship among Energy Consumption (E), Financial System Development (F), Industrailization (I), Agriculture Development (A) and Economic Growth (Y) in case of Pakistan for the period 1971-2018 by using cointegration approach. After confirming the level of stationarity, the presence of long run relationship among the series was tested through newly developed combined cointegration approach in addition to ARDL bound testing with structural break dummy. The short run and long run parameter coefficients were estimated by unrestricted error correction model (UECM) because all the series are found stationary at 1st difference I(1) and sufficient evidence of cointegration. Finally, the direction of causality among the considered variables was achieved through Granger causality test within the framework of VECM. The long run parameter coefficient estimates by UECM indicate that financial development, industrialization, economic growth and decrease in agricultural contribution to GDP induce electricity consumption in Pakistan. We also found that a long-run unidirectional causality is running from the economic growth to electricity consumption which favors the electricity conservation hypothesis in case of Pakistan. The causality running from the electricity consumption to agriculture output coupled with negative parameter coefficient value suggests that electric power deficit is responsible for hampering the agricultural growth in Pakistan. The study suggests that electricity conservation policy in addition to prudent rationing of electric power among the various sectors may greatly contribute to minimize the adverse effects of energy crisis in Pakistan.
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| first_indexed | 2024-04-10T10:58:57Z |
| format | Article |
| id | doaj.art-8ec1c9ef7bb044febadf7531aa0e53a7 |
| institution | Directory Open Access Journal |
| issn | 2146-4553 |
| language | English |
| last_indexed | 2024-04-10T10:58:57Z |
| publishDate | 2022-05-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Energy Economics and Policy |
| spelling | doaj.art-8ec1c9ef7bb044febadf7531aa0e53a72023-02-15T16:19:46ZengEconJournalsInternational Journal of Energy Economics and Policy2146-45532022-05-0112310.32479/ijeep.12930Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in PakistanSohail Amjed0Iqtidar Ali Shah1Adnan Riaz2Department of Business Administration, University of Technology and Applied Sciences, Sultanate of Oman. Department of Business Administration, Yorkville University, British Columbia, CanadaDepartment of Business Administration, Allama Iqbal Open University Islamabad, Pakistan. This paper attempts to investigate the dynamic relationship among Energy Consumption (E), Financial System Development (F), Industrailization (I), Agriculture Development (A) and Economic Growth (Y) in case of Pakistan for the period 1971-2018 by using cointegration approach. After confirming the level of stationarity, the presence of long run relationship among the series was tested through newly developed combined cointegration approach in addition to ARDL bound testing with structural break dummy. The short run and long run parameter coefficients were estimated by unrestricted error correction model (UECM) because all the series are found stationary at 1st difference I(1) and sufficient evidence of cointegration. Finally, the direction of causality among the considered variables was achieved through Granger causality test within the framework of VECM. The long run parameter coefficient estimates by UECM indicate that financial development, industrialization, economic growth and decrease in agricultural contribution to GDP induce electricity consumption in Pakistan. We also found that a long-run unidirectional causality is running from the economic growth to electricity consumption which favors the electricity conservation hypothesis in case of Pakistan. The causality running from the electricity consumption to agriculture output coupled with negative parameter coefficient value suggests that electric power deficit is responsible for hampering the agricultural growth in Pakistan. The study suggests that electricity conservation policy in addition to prudent rationing of electric power among the various sectors may greatly contribute to minimize the adverse effects of energy crisis in Pakistan. https://econjournals.com/index.php/ijeep/article/view/12930Financial DevelopmentIndustrializationAgriculture DevelopmentEconomic GrowthEnergy CrisesPakistan |
| spellingShingle | Sohail Amjed Iqtidar Ali Shah Adnan Riaz Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in Pakistan International Journal of Energy Economics and Policy Financial Development Industrialization Agriculture Development Economic Growth Energy Crises Pakistan |
| title | Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in Pakistan |
| title_full | Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in Pakistan |
| title_fullStr | Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in Pakistan |
| title_full_unstemmed | Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in Pakistan |
| title_short | Investigating the Interactive Role of Demand Side Factors Potentially Responsible for Energy Crisis in Pakistan |
| title_sort | investigating the interactive role of demand side factors potentially responsible for energy crisis in pakistan |
| topic | Financial Development Industrialization Agriculture Development Economic Growth Energy Crises Pakistan |
| url | https://econjournals.com/index.php/ijeep/article/view/12930 |
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