Energy consumption, export performance and economic growth in a landlocked developing country: The case of Nepal

Resham Thapa-Parajuli; Saurav Aryal; Majed Alharthi; Ramesh C Paudel; Resham Thapa-Parajuli; Saurav Aryal; Majed Alharthi; Ramesh C Paudel

doi:10.3934/energy.2021025

AIMS Energy

2021, Volume 9, Issue 3: 516-533. doi: 10.3934/energy.2021025

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Energy consumption, export performance and economic growth in a landlocked developing country: The case of Nepal

1.
Central Department of Economics, Tribhuvan University, P.O. Box 3821, Nepal
2.
Finance Department, College of Business, King Abdulaziz University, Rabigh, P. O. Box. 344, Saudi Arabia
3.
Global Institute for Interdisciplinary Studies, P.O. Box 3084, Kathmandu, Nepal

Received: 10 November 2020 Accepted: 25 April 2021 Published: 30 April 2021

This paper examines the short-run and long-run relationship between energy consumption, export performance, and economic growth in a landlocked developing country, Nepal, from 1980 to 2018. We employ an Autoregressive distributed lag (ARDL) bounds testing approach to co-integration to investigate the relationship and role of energy consumption and exports on economic growth. The estimated results confirm the existence of a long-run relationship between economic growth and its regressors. The empirical estimation indicates the presence of a positive and statistically significant impact of exports on economic growth. Energy consumption and economic growth are positively associated; however, the coefficient is not statistically significant. Using the Granger Causality approach, the causality test reveals that there is unidirectional causality from energy consumption to economic growth, economic growth to export, and energy consumption to export.
- energy consumption,
- export,
- economic growth,
- ARDL
Citation: Resham Thapa-Parajuli, Saurav Aryal, Majed Alharthi, Ramesh C Paudel. Energy consumption, export performance and economic growth in a landlocked developing country: The case of Nepal[J]. AIMS Energy, 2021, 9(3): 516-533. doi: 10.3934/energy.2021025

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Abstract

This paper examines the short-run and long-run relationship between energy consumption, export performance, and economic growth in a landlocked developing country, Nepal, from 1980 to 2018. We employ an Autoregressive distributed lag (ARDL) bounds testing approach to co-integration to investigate the relationship and role of energy consumption and exports on economic growth. The estimated results confirm the existence of a long-run relationship between economic growth and its regressors. The empirical estimation indicates the presence of a positive and statistically significant impact of exports on economic growth. Energy consumption and economic growth are positively associated; however, the coefficient is not statistically significant. Using the Granger Causality approach, the causality test reveals that there is unidirectional causality from energy consumption to economic growth, economic growth to export, and energy consumption to export.

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