Econometric analysis of the economic growth-energy consumption nexus in emerging economies: The role of globalization

This chapter provides new evidence on the impact of economic, social, and political globalization on economic growth and energy consumption nexus in a panel of 23 emerging economies for the period 1970-2015. Using the Pooled Mean Group estimator, four main empirical evidence were established. First, economic, social, and political globalization stimulate economic growth in the long-run. Second, we find robust evidence suggesting that economic, social, and political globalization directly reduce energy consumption. Third, we find economic growth contributes significantly to energy consumption while energy consumption only contributes significantly to economic growth in the presence of economic and social globalization. Finally, while globalization factors significantly influence energy consumption and economic growth, the effect is nonlinear and varies substantially across energy consumption and economic growth models. Our findings are robust to fully modified ordinary least square and dynamic ordinary least square estimators. The policy implications of these findings for emerging economies are discussed.