dc.description.abstract |
This Study investigated (i) the causality relationship between economic growth and energy
consumption and (ii) discussed the validity of EKC. The researched used data for 18 country
from MENA region (Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya,
Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates and Yemen), using
data for different periods for each country varying between 1971 and 2011. Data of energy
consumption, real GDP per capita and CO2 emissions - as a proxy for environment degradationwas
collected from the online database of World Bank. The researcher examined the linkage
between these variables both across the region level and the country level. For this regard, and to
avoid different characteristics among these 18 countries; countries with similar characteristics
were compiled in different Panels, using the World Bank classification based on income level.
High Income, Upper Middle Income, Lower Middle Income and GCC panels were constructed
besides the Panel of the 18 country. Unit Root Tests were applied to examine the stability of data
both for time series and panels; where all data was stationary. Then two different co-integration
tests were applied as Pedroni test for Panel data while Johannsen Test for time series data. It was
found that only 3 Panels are co-integrated (High Income, Upper Middle Income and GCC), at the
country level only four countries have non co-integrated data (Libya, Qatar, Morocco and
Oman). Therefore, the causality tests were applied only on co-integrated data as Panel Causality
Test for Panel data and Granger Causality Test using the VECM for the time series data. Results
were similar and showed no causality directions for the panel data. But for the time series, results
were different as the direction goes from GDP to energy for Bahrain, Saudi Arabia, Iraq and
Syria. Only one country showed bidirectional causality between GDP and energy consumption
(Algeria). Many of these countries confirmed that no causality occurs between economic growth
and energy consumption (United Arab Emirates, Jordan, Iran, Tunis, Egypt, Yemen, Lebanon
and Israel). Only Kuwait confirmed the growth hypotheses; as energy cause economic growth.
Regarding the validity of EKC, results confirmed that this concept is just a theoretical one,
empirically results showed a poor evidence of the existence of EKC. |
en_US |