What is the role of Financial Development and Energy Consumption on Economic Growth?

Abstract

This paper aims to test the validity of the causality between financial development and economic growth on energy consumption in three of North African countries. The study employs error coreection model and Granger causaility test to analyza a dataset for three North African countries covering a period from 1980 to 2010. The applied model is based on demand function for energy to assess the existing of causal relationship of energy with financial development, and economic growth, in Algeria, Egypt, and Tunisia. Empirical results provide a positive significant relating financial development and energy consumption in Algeria, and Tunisia. On the other hand, Egypt’s results show a negative significant relationship relating energy consumption and financial development. The paper is valuable to policy makers in North African countries in their pursuit for achieving economic growth as it clarifies the urge for the financial development reforms to stimulate investment and growth.

Keywords: {'name': 'Financial Development'}, {'name': 'Economic Growth'}, {'name': 'Energy consumption'}

Authors & affiliations

Doaa Mohamed Salman
Affiliation not supplied

Eyad Atya
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

DOI: 10.1111/j.1467-9361.2008.00427.x

of Policy Modeling .30: 887–898.

DOI: 10.1016/S0921-8009(98)00040-8

Economics, 2, 267-277.

DOI: 10.1080/09603100500120639

Financial Economics, 15, 1041–51.

DOI: 10.1080/1331677X.2011.11517455

Kingdom. Economic Research, 9, 330–335.

DOI: 10.1016/j.eneco.2008.09.002

co-integration and error correction model. Energy Economics, 31, 211–216.

DOI: 10.1080/02692170500208459

liberalization. International Review of Applied Economics, 18, 381–398.

DOI: 10.1016/S0140-9883(00)00050-5

series evidence from Asian developing countries. Energy Economics, 22, 615-625.

DOI: 10.2139/ssrn.487604

International Money and Finance, 23, 311–331.

DOI: 10.1016/j.enpol.2010.02.025

and multivariate models. Energy Policy, 38, 3505–3517

DOI: 10.2139/ssrn.61988

DOI: 10.1016/j.jfineco.2004.05.007

Economics, 77, 53–55

DOI: 10.2307/2297964

Economic Studies, 58, 195–209.

Birol, F., Aleaha Av., Ferrouk R. (1995). The Economic Impact of Subsidy Phase Out in Oil Exporting Developing

Countries: A Case Study of Algeria, Iran, and Nigeria, Energy Policy. 23, 209-215.

Boulila, Ghazi, Mohamed Trabelsi, (2004). The Causality Issue in the Finance and Growth Nexus: Empirical

Evidence from Middle East and North African Countries. Review of Middle East Economics and Finance, 2, 123–38.

DOI: 10.2307/2286348

Journal of the American Statistical Association, 74, 427-431.

Elhag, M., A. Fedelino and K. Nashashibi. (2000). Financial crisis liberalization in Arab countries: An overview,

seminar on Monetary and fiscal policies, Damascus.Available at: http://www.irtipms.org/OpenSave.asp?pub=215.pdf

DOI: 10.1016/S0921-8009(03)00008-9

-148.

DOI: 10.1016/j.jimonfin.2008.08.001

International Money and Finance, 28, 56–78.

DOI: 10.2139/ssrn.1137584

Kuznets Curve Hypothesis. Environmental and Resource Economics, 4, 551- 574.

DOI: 10.1111/1467-9361.00070

Development Economics, 3, 310–22.

Goldsmith, R. W. (1969). Financial Structure and Development, New Haven, CT: Yale University Press.

DOI: 10.21034/wp.446

Political Economy, 98, 1076–1077.

DOI: 10.1016/0047-2727(94)01449-X

Economics, 1, 85-101.

Islam, F., Shahbaz, M., Alam, M. (2011). Financial Development and Energy Consumption Nexus in Malaysia: A

Multivariate Time Series Analysis. MPRA Study 28403, University Library of Munich, Germany.

DOI: 10.1016/S0140-9883(03)00058-6

Malawi. Energy Econonomics, 26, 61-68.

DOI: 10.2139/ssrn.1445738

WP/00/209

DOI: 10.2307/2118406

, 717–738.

Levine, R. (1996). Financial Development and Economic Growth: Views and Agenda. Policy Research Working

Study Series 1678. The World Bank

DOI: 10.20955/r.85.31-46

DOI: 10.1159/000442021

DOI: 10.1016/0304-3932(88)90168-7

DOI: 10.1016/0304-4076(82)90011-2

DOI: 10.5547/ISSN0195-6574-EJ-Vol27-No4-7

Use and/or Carbon Emissions? Ecological Economics, 2, 176-189.

Robinson, J. (1952). The generalization of the general theory. In: The Rate of Interest and Other Essays. MacMillan,

London.

DOI: 10.1016/j.jpolmod.2004.04.007

DOI: 10.1016/j.apenergy.2009.10.010

Hungary and Romania: evidence from ARDL bound testing approach. Applied Energy, 87, 1938–1943.

DOI: 10.1016/j.enpol.2009.12.048

Policy, 38, 2528–2535.

DOI: 10.1006/jeem.1994.1031

Emissions? Journal of Environmental Economics and Management, 2, 147- 162.

Shahbaz, M., Islam, F., Islam, M.M. (2012). Does financial development increase energy consumption? The role of

industrialization and urbanization in Tunisia. Energy policy, 40, 473- 479.

DOI: 10.2307/2233764

DOI: 10.1016/S0305-750X(00)00006-1