Economic Growth, Electricity Consumption and Internet Usage Nexus: Evidence from a Panel of Commonwealth of Independent States

Max Freidin, Dmitry Burakov

Abstract


In this paper we investigate the long- and short-run effects of economic growth and Internet usage on electricity consumption using a panel data for countries – members of Commonwealth of Independent States for the period 1991-2017. The study is based on panel unit root test, panel cointegration test, the pooled mean group regression technique and Dumitrescu–Hurlin panel Granger causality test. The results show that Internet usage affects electricity consumption in the long-run. A 1% increase in the number of the Internet users per 100 people increases electricity consumption per capita by 0.021% in the sampled countries Economic growth affects electricity consumption both in the short- and long-run. A 1% increase in economic growth rate cause a 1.45% increase in electricity consumption per capita in CIS states. Results of panel causality test show that Internet usage and economic growth cause electricity consumption.

Keywords: Electricity consumption, economic growth, internet usage, panel analysis, causality

JEL Classifications: L94, O4, Q4, Q42, O1


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