A Dynamic Panel Data Analysis for Relationship between Energy Consumption, Financial Development and Economic Growth

Tarek Sadraoui^1, , Hamid Hamlaoui², Zine Youness³ and Imen Ben Sadok¹

¹Quantitative Methods, Universityof Monastir, Mahdia, Tunisia

²Management, Université 8 mai 1945 Guelma, Algeria

³Economics, Université Hamma lakhdhar Eloued, Algeria

Cite this paper:
Tarek Sadraoui, Hamid Hamlaoui, Zine Youness and Imen Ben Sadok. A Dynamic Panel Data Analysis for Relationship between Energy Consumption, Financial Development and Economic Growth. International Journal of Econometrics and Financial Management. 2019; 7(1):20-26. doi: 10.12691/ijefm-7-1-3

Abstract

The purpose of this work is to investigate the cointegration and Granger causal relationship between economic growth and total energy consumption as well as the relationship between economic growth and financial development in the MENA region by using a panel data analysis the period over 2000-2018. Different from limited existing provincial studies on the MENA region, an advanced panel econometric methodologies such as dynamic Panel data techniques consider the question of the energy use-economic growth-financial development nexus. Our results suggest that energy consumption exerts a positive and significant impact on economic growth. Furthermore a positive relationship between financial development and economic growth was detected. Thereby it is important to examine the causal effects of both the total energy use and the financial system before local governments make specific energy and economic policies.

Keywords:
economic growth energy use financial development

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