Electricity consumption, urbanization, and economic growth in Nigeria: New insights from combined cointegration amidst structural breaks


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Nathaniel S. P., Bekun F. V.

Journal of Public Affairs, vol.21, no.1, 2021 (ESCI) identifier

  • Publication Type: Article / Article
  • Volume: 21 Issue: 1
  • Publication Date: 2021
  • Doi Number: 10.1002/pa.2102
  • Journal Name: Journal of Public Affairs
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, Academic Search Premier, IBZ Online, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, Communication & Mass Media Index, PAIS International, Political Science Complete, Public Affairs Index, vLex
  • Istanbul Gelisim University Affiliated: Yes

Abstract

The study explores the link between electricity consumption, urbanization, and economic growth in Nigeria from 1971 to 2014. The bounds test and the Bayer and Hanck (Journal of Time Series Analysis, 2013, 34(1), 83–95) cointegration tests affirm cointegrating relationship. Electricity consumption increases economic growth in both time periods, while the impact of urbanization appears to inhibit growth. The fully modified OLS, dynamic OLS, and the canonical cointegrating regression confirm the robustness of the findings. The vector error correction model Granger causality test supports the neutrality hypothesis in the short run and the feedback hypothesis among the variables in the long run. Therefore, policies to ensure efficient electricity supply, curb rapid urbanization, and promote sustainable economic growth were suggested.