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Analysis on the nexus of economic growth, fossil fuel energy consumption, CO2 emissions and oil price in Africa based on a PMG panel ARDL approach
- Mensah, Isaac Adjei, Sun, Mei, Gao, Cuixia, Omari-Sasu, Akoto Yaw, Zhu, Dongban, Ampimah, Benjamin Chris, Quarcoo, Alfred
- Journal of cleaner production 2019 v.228 pp. 161-174
- carbon, carbon dioxide, econometrics, economic development, energy, fossil fuels, greenhouse gas emissions, issues and policy, models, oils, prices, time series analysis, Africa
- In this study, the causal link amid economic growth, fossil fuel energy consumption, carbon emissions and oil price was empirically tested from 1990 to 2015 by using a panel of 22 African countries. The sample of African countries was divided into two subgroups namely; Oil exporters and Non-oil exporters. Using the PMG panel ARDL and panel econometric methods, heterogeneity and cross-sectional dependence were considered to examine the long and short-term dynamic relationships as well as validity of a proposed model. Findings from the Pesaran-Yamagata homogeneity test, Pesaran CD test, CIPS and CADF panel unit root tests and Westerlund-Edgerton bootstrap panel cointegration indicated, the panel time series data has heterogeneity and cross-sectional dependence, analysed variables are stationary and cointegrated respectively. With respect to the PMG panel ARDL estimation method it was evidenced that there exist, (i) a bilateral causal link flanked by fossil fuel energy consumption and economic growth as well as fossil fuel energy consumption and carbon emissions in long and shot-terms for all panels, (ii) a unilateral causality from carbon emissions to economic growth in long-term and short-term for non-oil exporters nonetheless a bilateral causal relationship only in long-term for oil exporting countries, and (iii) a unilateral cause-and-effect link from oil prices to economic growth, energy consumption (fossil fuel) and carbon emission across all country groups in long and short-terms. Policy recommendations are further discussed.