ENERGY GENERATION AND AGGREGATE OUTPUT IN NIGERIA: EVIDENCE FROM NARDL
Keywords:Energy Generation, Aggregate Output, NARDL, energy supply, economic growth, energy generation
Energy generation has received a little or no attention over a period of time. Most scholars are focused on energy consumption and economic growth. This study empirically examined the asymmetric impact of energy generation on aggregate output in Nigeria between 1980 and 2019 using Nonlinear Autoregressive Distributed Lag (NARDL) Model. The stationarity test was conducted on the variables employed to avoid spurious regression. The result revealed that the variables were mixed at level and the first difference. The bound test result revealed that the variables are not cointegrated in the long run. Also, Wald test indicates that energy generation has short run impact on aggregate output in Nigeria. As revealed from the empirical results, from all sources of significant energy generation in Nigeria, gas generation brings the desired result to aggregate output in Nigeria. The study therefore suggests that action should refocus on the gas production subsector. This subsector needs to be developed carefully to avoid wasting this energy source by incineration. Also, the government should redirect those subsidies for petroleum products to the gas generation subsector.
Awodumi, O. B. & Adewuyi, A. O. (2020). The role of non-renewable energy consumption in economic growth and carbon emission: Evidence from oil-producing economies in Africa. Energy Strategy Reviews, 27, 100434.
Azlina, A. A. (2012). Energy consumption and economic development in Malaysia: A multivariate cointegration analysis. Procedia-Social and Behavioral Sciences, 65, 674-681.
Benli, M., Altintaş, H. & Kaplan, M. (2019). Asymmetric Effect Of Oil Prices On Economic Growth: Evidence From Turkey. Bilecik Şeyh Edebali Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 4(1), 266-279.
Chen, C., Pinar, M. & Stengos, T. (2020). Renewable energy consumption and economic growth nexus: Evidence from a threshold model. Energy Policy, 139, 111295.
Ha, N. M. & Ngoc, B. H. (2020). Revisiting the relationship between energy consumption and economic growth nexus in Vietnam: new evidence by asymmetric ARDL cointegration. Applied Economics Letters, 1-7.
Lin, B. & Ankrah, I. (2019). On Nigeria’s renewable energy program: Examining the effectiveness, substitution potential, and the impact on national output. Energy, 167, 1181-1193.
Ogunjimi, J. (2020). Oil Price Asymmetry and Sectoral Output in Nigeria. Available at SSRN 3531667.
Oyeleke, O. J. & Akinlo, T. (2019). Energy generation and economic growth: empirical evidence from Nigeria. Environment, Development and Sustainability, 1-15.
Ozoegwu, C. G. & Akpan, P. U. (2021). A review and appraisal of Nigeria’s solar energy policy objectives and strategies against the backdrop of the renewable energy policy of the Economic Community of West African States. Renewable and Sustainable Energy Reviews, 143, 110887.
Pal, D. & Mitra, S. K. (2019). Asymmetric oil price transmission to the purchasing power of the US dollar: A multiple threshold NARDL Modelling Approach. Resources Policy, 64, 101508.
Pesaran, M. H., Shin, Y. & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.
Rapu, C. S., Adenuga, A. O., Kanya, W. J., Abeng, M. O., Golit, P. D., Hilili, M. J., ...& Ochu, E. R. (2015). Analysis of energy market conditions in Nigeria. Abuja, Nigeria: Central Bank of Nigeria.
Shahbaz, M., Raghutla, C., Chittedi, K. R., Jiao, Z. & Vo, X. V. (2020). The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index. Energy, 207, 118162.
Sharma, R. & Kautish, P. (2020). Examining the non-linear impact of coal and oil-based electricity production on CO2 emissions in India. The Electricity Journal, 33(6), 106775.
Shin, Y., Yu, B. & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a non-linear ARDL framework. In Festschrift in honor of Peter Schmidt (pp. 281-314). New York, NY, USA: Springer.
How to Cite
Copyright (c) 2021 Acta Economica
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.