JOURNAL OF ECONOMICS, BUSINESS MANAGEMENT AND ADMINISTRATION


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Dynamics of Electricity Consumption and Its Impacts on Nigeria’s Economic Growth: Empirical Evidence from (Nonlinear) Threshold Regression Model

Adam Abbas Hamid*, Aondoawase Asooso and Naziru Yusuf Abdullahi

Article Number - 613B21E69CAB9  | Vol. 2(2), pp. 8-19, September 2021  | 
 Received: 5 June 2021 |  Accepted: 5 July 2021  |   Published: 30 September 2021

Copyright © 2022 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0.

Abstract

The study examined the dynamic relationship between electricity consumption and economic growth in Nigeria. Econometric techniques of existing studies assumed linearity among the variables used in the study/model(s). Hence, this study presents a novel evidence of nonlinearity between electricity consumption and Nigeria’s economic growth. The summary statistics of the variables of the study were observed. Afterward, the study employed nonlinear method of analysis to capture the actual relationship between the variables. The study employed Nonlinear Threshold Regression Model to address its objectives. Post-estimation Diagnostic Checks were conducted to validate the result, Bai-Perron (2003) multiple test of significance is employed to validate the results. It was found that there are positive and negative impact of electricity consumption and economic growth in Nigeria. Positive change in electricity consumption has a significant positive impact on economic growth, while a negative change in electricity consumption in Nigeria affects economic growth negatively. It is recommended that increasing electricity supply in the country will boost economic activities which will later translate to more economic growth. From there on, optimal production and utilization of electricity in the economy should be encouraged.

 

Keywords: Dynamics, Electricity, Non-linearity, Threshold-regression, Economic-growth.

 

JEL Classification: 011, 012, 013

 

 

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Authors

Adam Abbas Hamid*, Aondoawase Asooso and Naziru Yusuf Abdullahi

Federal University of Kashere, PMB 0182, Gombe, Nigeria.

 

*Corresponding author Email: [email protected], [email protected], [email protected]oo.com

 

 

How to Cite this Article

Hamid, A. A., Asooso, A. & Abdullahi, N. Y. (2021). Dynamics of Electricity Consumption and Its Impacts on Nigeria’s Economic Growth: Empirical Evidence from (Nonlinear) Threshold Regression Model. Journal of Economics, Business Management and Administration, 2(2), 8-19.

 

 

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