Vol. 10 No. 20 (2015)

Artículos

The nexus between energy consumption and economic growth: the case of México

Published 2015-01-05

  • Sibe Jacob Pegou
    • ,
  • Cesaire Chiatchoua

Sibe Jacob Pegou
Universidad de Dschang

Cesaire Chiatchoua
Tecnológico de Estudios Superiores de Chimalhuacán

Abstract

This study examines the relationship between energy consumption and economic growth in Mexico within a multivariate framework in order to determine the degree to which energy consumption influences economic growth prospects in Mexico. Throughout this study, we look at the relationship between different forms of energies and economy growth. We used the granger causality test, which enabled us to verify the direction of causality between the variables of interest; the Breusch-Godtrey Serial Correlation LM test, to test for serial correlation of the stochastic variable and the ADF to test for stationary of the model. The results showed that there is a bi- directional relationship between economic growth and energy consumption in Mexico. Looking at all the sectors of usage of energy, we found that electricity produced from coal, nuclear and hydroelectric sources impact positively on economic growth, whereas electricity produced from natural gas and oil highly negatively impact on economic growth.

Keywords

Mexico, energy consumption, growth, granger-causality, Breusch- Godfrey serial correlation LM Test

PDF (Spanish)

References

  1. Adom, P. K. (2011). "Electricity consumption-economic growth nexus: the Gha- naian case", International Journal of Energy Economics and Policy, 1, pp. 18-31.
  2. Binh P. T. (2011). "Energy consumption and Economic Growth in Vietnam: Threshold Co-integration and Causality Analysis", International Journal of Energy Economics and Policy, 1, pp. 1-17.
  3. Cheng, B. S. (1997). "Energy consumption and economic growth in Brazil, Mexico and Venezuela: a time series analysis", Applied Economics Letters, 4, pp. 671-674.
  4. Firouz, F. (2011). "Causal relationships between energy consumption (EC) and GDP: A Markov switching (MS) causality". Energy, 36, pp. 465-470.
  5. García, F; M. M. Foss, and A. B. Elizalde (2004). Analysis of the Electric Industry in Mexico: A Regional Approach, Technological of Monterrey (ITESM) and the Institute for Energy, Law & Enterprise, pp. 44.
  6. Gobierno de la República (2013). "Reforma Energética", México, pp.16.
  7. Kebede, E.; J. Kagochi and C. M. Jolly (2011). "Energy consumption and economic development in Sub-Sahara Africa", Energy Economics, 32(3), pp. 532-537.
  8. Kwakwa, P. A. (2012). "Disaggregated energy consumption and economic growth in Ghana". International Journal of Energy Economics and Policy, 2(1), pp. 34-40.
  9. Lau, E.; X. H. Chye and C. K. Choong (2011). "Energy-growth causality: Asian coun- tries revisited", International Journal of Energy Economics and Policy, 1, pp. 140-149.
  10. Lee, C.C. (2005). "Energy consumption and GDP in developing countries: a cointegrated panel analysis", Energy Economics 27 (3), pp. 415-427.
  11. Mahadevan, R. and J. Asafu-Adjaye (2007). "Energy consumption, economic growth and prices: a reassessment using panel VECM for developed and developing countries", Energy Policy, 35 (4), pp. 2481-2490.
  12. Mehrara, M. (2007). "Energy consumption and economic growth: the case of oil exporting countries", Energy Policy 35 (5), pp. 2939-2945.
  13. Murray, D. A. and G. D. Nan (1992). "The energy and employment relationship: a clarification". Journal of Energy and Development 16 (1), pp. 121-131.
  14. Murray, D. A. y G.D. Nan (1996). "A definition of the gross domestic product-electrification interrelationship" Journal of Energy and Development, 19, pp. 275-283.
  15. Nachane, D. M.; R. M. Nadkarni and A.V. Karnik (1988). "Cointegration and causality testing of the energy-GDP relationship: a cross-country study", Applied Economics, 20, pp. 111-131.
  16. Nacoud, G. A. (2012). "Evolución del Consumo de Energía en México". Financiamiento de la Salud en México, México, p. 128.
  17. Narayan, P. K. and A. Prasad (2008). "Electricity consumption-real GDP causality nexus: evidence from a bootstrapped causality test for 30 OECD countries", Energy Policy 36, pp. 910-918.
  18. Payne, J. E. (2010). "A Survey of the Electricity, Consumption and Growth Litera- ture"". Applied Energy, 87, pp. 723-731.
  19. Rosenberg, N. (1983). "The role of electricity in industrial development". The Energy Journal, 19, pp. 7-24.
  20. Sistema de Información Energética (SIE) (2009). Evolución del consumo nacional de Energía, variación porcentual anual, México.
  21. Squalli, J. (2007). "Electricity consumption and economic growth: bounds and cau- sality analyses of OPEC countries", Energy Economics, 29, pp. 1192-1205.
  22. Soytas, U. y R. Sari (2003). "Energy consumption and GDP: causality relationship in G-7 and emerging markets", Energy Economics, 25 (1), pp. 33-37.
  23. Toda, H.Y. y T. Yamamoto, (1995). "Statistical inference in vector autoregressions with possibly integrated process", Journal of Econometrics, 66, pp. 225-250.

Most read articles by the same author(s)