Investigating energy consumption and economic growth for BRICS-T countries

Abstract

PurposeThe purpose of this paper is to explore the relationship between energy consumption and economic growth for Brazil, Russia, China, India, South Africa and Turkey (BRICS-T) countries. In this context, this study investigates energy consumption and real output in BRICS-T countries through panel cointegration.Design/methodology/approachThe data include energy consumption and real output for BRICS-T countries and period of 1990–2014. The variables are transformed into natural logarithm. To analyze these data, this study employed Pedroni cointegration test, the second-generation panel cointegration test, Westerlund and Edgerton (2008) test and FMOLS test.FindingsResults indicate that there is a bi-directional causality relationship between energy consumption and economic growth for BRICS-T countries. An increase in GDP leads to an increase in energy consumption and an increase in energy consumption leads to an increase in GDP.Research limitations/implicationsThis study used data that include the period of 1990–2014 for BRICS-T countries. So, further studies can use different periods of data or different countries.Originality/valueThis study provides important evidence that countries with strong growth performance need to follow bi-directional energy policies to increase both energy investments and ensure energy savings.