Investigating energy consumption and economic growth for BRICS-T countries
| Pages | 184-195 |
| DOI | https://doi.org/10.1108/WJSTSD-12-2018-0063 |
| Date | 07 October 2019 |
| Published date | 07 October 2019 |
| Author | Durmuş Çağrı Yıldırım,Seda Yıldırım,Isıl Demirtas |
| Subject Matter | Public policy & environmental management,Environmental technology & innovation |
Investigating energy consumption
and economic growth for
BRICS-T countries
DurmuşÇağrıYıldırım and Seda Yıldırım
Namık Kemal University, Tekirdag, Turkey, and
Isıl Demirtas
Giresun University, Giresun, Turkey
Abstract
Purpose –The purposeof this paper is to explore the relationshipbetween energy consumptionand economic
growthfor Brazil, Russia, China, India,South Africa and Turkey (BRICS-T) countries.In this context, this study
investigates energy consumption andreal output in BRICS-T countries through panel cointegration.
Design/methodology/approach –The data include energy consumption and real output for BRICS-T
countries and period of 1990–2014. The variables are transformed into natural logarithm. To analyze these
data, this study employed Pedroni cointegration test, the second-generation panel cointegration test,
Westerlund and Edgerton (2008) test and FMOLS test.
Findings –Results indicate that there is a bi-directional causality relationship between energy consumption
and economic growth for BRICS-T countries. An increase in GDP leads to an increase in energy consumption
and an increase in energy consumption leads to an increase in GDP.
Research limitations/implications –This study used data that include the period of 1990–2014 for
BRICS-T countries. So, further studies can use different periods of data or different countries.
Originality/value –This study provides important evidence that countries with strong growth performance
need to follow bi-directional energy policies to increase both energy investments and ensure energy savings.
Keywords Economic growth, Energy consumption, Panel cointegration, BRICS-T
Paper type Research paper
1. Introduction
Brazil, Russia, China and India (BRIC) are emerging economies at regional and international
levels in recent years. Jim O’Neil determined term of BRIC by 2001 and now this term is used
commonly. Economic size, strong economic growth rates and international political forces
are major characteristics of BRIC countries (Morazan et al., 2012, p. 6). Although Brazilian
and Russian economies have been declining for past few years, BRIC countries continue to
be influential in global markets due to their economic and demographic scales (O’neill et al.,
2005, p. 7). According to World Bank Data, the group, which is also referred to as BRICS
with the participation of South Africa in 2011, has 41.7 percent of total world population, has
29.5 percent of total surface of Earth and has 22 percent of total revenue. The economic size
of the countries also increases the share of world energy consumption. The energy
consumption rate of countries that consuming 36 percent of the total primary energy has
increased by 16 percent over the past decade (BP, 2017).
It is thought that investigating the relationship between energy consumption and output
is an important issue for policy makers. For example, the bi-directional relationship between
energy consumption and real output shows that energy consumption and economic growth
are related and policy makers should take care of this result. Also, while high levels of
economic growth lead to energy demand, a shrinkage in energy demand may also effect
economic growth negatively. In this context, countries should determine new strategies that
World Journal of Science,
Technology and Sustainable
Development
Vol. 16 No. 4, 2019
pp. 184-195
© Emerald PublishingLimited
2042-5945
DOI 10.1108/WJSTSD-12-2018-0063
Received 5 December 2018
Revised 3 May 2019
Accepted 24 June 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2042-5945.htm
This study was presented in International Congress Of Energy Economy And Security –2018 Spring
in Istanbul, Turkey.
184
WJSTSD
16,4
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