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The Role of Information Communication Technology and Economic Growth in Recent Electricity Demand: Fresh Evidence from Combine Cointegration Approach in UAE

par Shahbaz, Muhammad;Rehman, Ijaz Ur;Sbia, Rashid ;Hamdi, Helmi
Référence Journal of the knowledge economy, 7, 3, page (797-818)
Publication Publié, 2016-09

Article révisé par les pairs

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Résumé :

This paper investigates the relationship among information communication technology (ICT), economic growth, and electricity consumption in the case of the UAE. The study covers the period of 1975–2011. We have tested the unit root properties of the variables and applied the Bayer-Hanck combined cointegration approach for the long-term relationship. The innovative accounting approach is applied to test the robustness of the VECM Granger causality findings. Our empirical results confirm the existence of the cointegration between the series. We find that ICT increases electricity demand but electricity prices lower it. Income growth increases electricity consumption. The nonlinear relationship between ICT and electricity consumption is an inverted U-shaped. The causality results reveal that ICT and electricity price Granger cause electricity demand. The feedback effect exists between economic growth and electricity consumption. This paper provides new insights to policy makers in designing a comprehensive energy and ICT policy to sustain economic growth for long span of time, although the feedback effect between economic growth and electricity consumption encourages in continuing electricity supply policies.