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Electricity consumption, urbanization, and economic growth in Nigeria: New insights from combined cointegration amidst structural breaks
Author(s) -
Nathaniel Solomon P.,
Bekun Festus V.
Publication year - 2021
Publication title -
journal of public affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.221
H-Index - 20
eISSN - 1479-1854
pISSN - 1472-3891
DOI - 10.1002/pa.2102
Subject(s) - cointegration , economics , urbanization , granger causality , econometrics , consumption (sociology) , short run , ordinary least squares , error correction model , electricity , robustness (evolution) , mains electricity , macroeconomics , economic growth , power (physics) , biology , social science , biochemistry , engineering , sociology , gene , electrical engineering , physics , quantum mechanics
The study explores the link between electricity consumption, urbanization, and economic growth in Nigeria from 1971 to 2014. The bounds test and the Bayer and Hanck ( Journal of Time Series Analysis , 2013, 34 (1), 83–95) cointegration tests affirm cointegrating relationship. Electricity consumption increases economic growth in both time periods, while the impact of urbanization appears to inhibit growth. The fully modified OLS, dynamic OLS, and the canonical cointegrating regression confirm the robustness of the findings. The vector error correction model Granger causality test supports the neutrality hypothesis in the short run and the feedback hypothesis among the variables in the long run. Therefore, policies to ensure efficient electricity supply, curb rapid urbanization, and promote sustainable economic growth were suggested.