Road energy consumption, economic growth, population and urbanization in Egypt: cointegration and causality analysis
- 1.1k Downloads
The study investigates the causal relationships between road energy consumption, economic growth, urbanization and population growth in Egypt over the period (1980–2011). I use Johansen cointegration approach, vector error correction model (VECM), generalized impulse response functions and variance decomposition technique. The results show the existence of long-run relationship between the variables. Moreover, the results indicate the existence of unidirectional long-run causality running from road energy consumption to urbanization and from road energy consumption to economic growth which implies the existence of growth hypothesis in the long run. Also, there is bidirectional short-run causality between road energy consumption and economic growth, which indicates the existence of feedback hypothesis in the short run. These results imply that road energy consumption determines economic growth in the both short run and long run and economic growth causes road energy consumption in the short run. And according to these results, several policy implications will be suggested for policymakers. They should take into consideration while implementing energy conservation policies, the possible negative effect on economic growth and have to concentrate on technological development policies and to make a shift towards using clean alternative fuel as natural gas and focus on investment in renewable energy resources.
KeywordsRoad energy consumption Urbanization Economic growth Population
- Banafea, W. A. (2014). Structural breaks and causality relationship between economic growth and energy consumption in Saudi Arabia. International Journal of Energy Economics and Policy, 4(4), 726–734.Google Scholar
- Bekhet, H. A., & Othman, N. S. (2011). Causality analysis among electricity consumption, consumer expenditure, gross domestic product (GDP) and foreign direct investment (FDI): Case study of Malaysia. Journal of Economics and International Finance, 3(4), 228–235.http://www.academicjournals.org/journal/JEIF/article-abstract/5FE5F7B4786.
- Central Agency for Public Mobilization & Statistics (CAPMAS). (2016). Egypt in figures, Arab Republic of Egypt.Google Scholar
- Economic and Social Commission for Western Asia (ESCWA). (2014). Policy reforms to promote energy efficiency in the transportation sector in Egypt.Google Scholar
- EIA (US Energy Information Administration). (2015). International Energy Statistics. Available online at: https://www.eia.gov/beta/international/analysis.
- El-Dorghamy, A., Allam, H., Al-Abyad, A., & Gasnier, M. (2015). Fuel economy and CO 2 emissions of light duty vehicles in Egypt. Al Matar: Centre for Environment and Development in the Arab Region and Europe.Google Scholar
- Fedderke J. W., & Bogeti Z. (2006). Infrastructure and growth in South Africa: Direct and indirect productivity. Impacts of 19 infrastructure measures. World Bank Policy Research Working Paper 3989.Google Scholar
- Howeidy, A. (2009). Cairo’s informal areas between urban challenge and hidden potentials, facts, voices, visions. Criterio Produca Grafica, Lda. Portugal.Google Scholar
- Kraft, J., & Kraft, A. (1978). On the relationship between energy and GNP. Journal of Energy and Development, 3(2), 401–403.Google Scholar
- Pala, A. (2016). Which energy growth hypothesis is valid in OECD countries? Evidence from panel causality analysis. International Journal of Energy Economics and Policy, 6(1), 28–34.Google Scholar
- Ragab, A., & Fouad, H. (2009). Roads and highways in Egypt: Reform for enhancing efficiency. The Egyptian Center for Economic Studies, Working paper No. 152.Google Scholar
- Ramanathan, R. (2001). The long-run behavior of transport performance in India: A cointegration approach. Transportation Research Part A, 35(4), 309–320.Google Scholar
- Saboori, B., Sapri, M., & Baba, M. (2014). Economic growth, energy consumption and CO2 emissions in OECD (Organization for Economic Co-operation and Development)’s transport sector: A fully modified bi-directional relationship approach. Energy, 66, 140–161. doi: 10.1016/j.energy.2013.12.048.CrossRefGoogle Scholar
- Salim, R., Rafiq, S., & Hassan, A. F. M. K. (2008). Causality and dynamics of energy consumption and output: Evidence from non-OECD Asian countries. Journal of Economic Development, 33, 1–26.Google Scholar
- Soytas, U., Sari, R., & Ozdemir, O. (2001). Energy consumption and GDP relations in Turkey: A cointegration and vector error correction analysis, economies and business in transition. In Facilitating competitiveness and change in the global environment proceedings (pp. 838–844). Global Business and Technology Association.Google Scholar
- The World Bank. (2015). World development indicators (WDI), Washington, DC [Online]. https://data.worldbank.org/data-catalog/world-development-indicators. Accessed June 26, 2015.
- United Nations Statistics Division (unstats), 2014 Energy Balances. United Nations, New York, 2016. http://unstats.un.org/unsd/energy/balance/2014/bcf.pdf.
- World Energy Council. (2011). Global transport scenarios 2050. https://www.worldenergy.org/wp-content/uploads/2012/09/wec_transport_scenarios_2050.pdf.
- Yazdi, S. K., & Shakouri, B. (2014). The impact of energy consumption, income, trade, urbanization and financial development on carbon emissions in Iran. Advances in Environmental Biology., 8(5), 1293–1300.Google Scholar
- Yu, E. S. H., & Choi, J. Y. (1985). The causal relationship between energy and GNP: An international comparison. Journal of Energy and Development, 10(2), 249–272.Google Scholar