Evaluating the Asymmetric Causal Relationship between Hydrocarbon products Consumption and Economic Growth in Iran

Boroomandfar, Parastoo; Daghighi Asli, Alireza; Mehrabian, Azadeh; Damankeshideh, Marjan

doi:10.22050/pbr.2021.261256.1148

Document Type : Original Article

Authors

¹ Ph.D. Candidate, Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran

² Assistant Professor, Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran

https://doi.org/10.22050/pbr.2021.261256.1148

Abstract

This paper analyzes the existence of an asymmetric causality relationship between the consumption of hydrocarbon products in four sectors: residential-commercial, manufacturing, agricultural, and transportation, and the economic growth of Iran during the years 1981-2017. To achieve this goal, the effect of positive and negative shocks of the mentioned variables is investigated using the asymmetric causality approach of Hatemi-J (2012). Research results suggest a two-way causal relationship between the positive shocks of economic growth and the consumption of carriers of hydrocarbons in all four residential-commercial, manufacturing, agricultural and transportation sectors. There is a two-way causal relationship between negative economic growth shocks and hydrocarbon carriers’ consumption in agriculture and transportation, and a one-way causal relationship between hydrocarbon energy carriers’ consumption and economic growth in the residential-commercial and industrial sectors. There is no causal relationship between non-directional shocks of hydrocarbon consumption and economic growth.

Keywords

20.1001.1.26454726.2020.4.4.5.8

Main Subjects

Oil and Gas Economics and Management

References

Adams, S., Klobodu, E., & Opoku, E. (2016). Energy Consumption, Political Regime and Economic Growth in sub-Saharan Africa. Energy Policy, 96, 36-44.

Amade, Hamid. Ghazi, Morteza. And Abbasi Far, Zohreh. (2009). the Relationship between Energy Consumption, Economic Growth and Employment in Various Sectors of Economy, Journal of Economic Research, 86, 1-38.

Bai, Jushan & Perron, Pierre. (2003). Computation and Analysis of Multiple Structural Change Models, Journal of Applied Econometrics, NO. 18, PP. 1–22.

Bayat, T., Kayhan, S., & Senturk, M. (2017). There Any Asymmetry in Causality between Economic Growth and Energy Consumption? , Journal of Economic Cooperation and Development, 38(4), 77-94.

Baz, K., Xu, D., Ampofo, G., ali, I., Khan, I., Cheng, J., & Ali, H. (2019). Energy Consumption and Economic Growth Nexus: New Evidence from Pakistan Using Asymmetric Analysis, Energy, Article 116254, 2019.

Chen, Shyh-Wei., & Lin, Cheng-Hui. (2014). Asymmetric Causality between Foreign Exchange Rates and Stock Prices: New Evidence from the Pacific Rim Economies, Statistical Association, 52, 265–299.

Destek, M. (2016). Natural Gas Consumption and Economic Growth: Panel Evidence from OECD Countries. Energy, 114, 1007-1015.

Fadiran, Gideon. Adebusuyi, Adebisi T., & Fadiran, David. (2019). Natural Gas Consumption and Economic Growth: Evidence from Selected Natural Gas Vehicle Markets in Europe, Energy, 169(C), 467-477.

-Fotros, Mohamadhasan, Aghazadeh, Akbar, and Jebraieli, Soda. (2015). Relationship between Panel Causality between Renewable Energy Consumption and Economic Growth, Comparison of Different Regions of the World, Research Journal of Macroeconomy, 127-150.

Hatemi-J, Abdulnasser. (2019). the Causal Impact of Stock Market Development on Economic Development in the Uae: An Asymmetric Approach, International Economics, 72(2), 171-184.

Hatemi-j, H., Lee, Chi, Lee, Chien. & Gupta, R. (2018). Insurance Activity and Economic Performance: Fresh Evidence from Asymmetric Panel Causality Tests, International Finance: 1-20.

Hatemi-J, Abdulnasser. (2019). Asymmetric Causality Tests with an Application, Empir Econ, 43, 447–456, 2012.

IRAN, Eia.

Liddle, Brantley. & Sadorsky, Perry. (2020). How much do Asymmetric Changes in Income and Energy Pricesaffect Energy Demand? The Journal of Economic Asymmetries, 21, e00141.

Ling, Tan Yan., Shaari Mohd nor, Abu Hassan, Saud, Nur Adilah., & Ahmad, Zailati. (2013). Testing for Unit Roots and Structural Breaks: Evidence from Selected ASEAN Macroeconomic Time Series, International Journal of Trade, Economics and Finance, 4(4), 230-237.

Lotfalipour, Mohammad Reza., Mahdavi Adeli., Mohammad Hossein., and Rezaei, Hassan. (2016). Study on the Relationship between Energy Consumption, Economic Growth and Export Industry in Iran (Analysis Based on Panel Data), Quarterly Journal of Economic Growth and Development Research, 6(24), 17-38.

Nilsson, Isaballe. (2009). Unit Root Tests and Structural Breaks in the Swedish Electricity Price, Lulea University of Tecnology, Department of Business Admiministration and Social Sciences, Master’s Thesis.

Osman, M., Gachino, G., & Hoque,A. (2016). Electricity Consumption and Economic Growth in the GCC Countries: Panel Data Analysis. Energy Policy, 98, 318-327.

Phukon, Abhijit. & Konwar, Mitali. (2019) An Empirical Investigation of the Causal Relationship amongst Energy Consumption, Net Fixed Capital Stock and Economic Growth in India, The International Journal of Social Sciences and Humanities Invention, 6(5), 5449-5454.

Sarfaraz, Syed Ali Shah., & Zwick, Syed Helene. (2016). Oil Price Shocks and the US Stock Market:Slope Heterogeneity Analysis, Theoretical Economics Letters, 6, 480-487.

Shahbaz, M., Farhani, S., & Mafizur Rahman, M. (2013). Natural Gas Consumption and Economic Growth Nexus: The Role of Exports, Capital and Labor in France, Munich Personal RePEc Archive.

Shahbaz, Muhammad. Zakaria, Muhammad, Syed, Jawad, & Kumar, Mantu. (2018). The Energy consumption and Economic Growth Nexus in Top Ten Energy-Consuming Countries: Fresh Evidence from Using the Quantile-on-Quantile Approach, Munich Personal RePEc Archive.

Shakibaee, Alireza, and Ahmadloo, Majid. (2012). Investigating the Relationship between Energy Carrier Consumption and the Growth of Energy Sub-Sectors in Iran, 1967-2008, Vector Error Correction Approach, Quarterly Journal of Energy Economics Studies, 8(30), 181-203.

Tuna, Gülfen. & Tuna, Vedat Ender. (2019). non- Renewable Energy Consumption and Economic growth in the ASEAN-5 Countries, Resources Policy, 62(C):114-124.

Wooldridge, J. (2009). Introductory Econometrics: A Modern Approach", South Western cengage Learning.

Xu, J., Zhou, M., & Li, H. (2018). The Drag Effect of Coal Consumption on Economic Growth in China during 1953-2013, Resources, Conservation and Recycling, 129, 326-332.

Zhixin,Z., & Xin,R. (2011). Causal Relationships between Energy Consumption and Economic Growth, Energy Procedia, 2065-2071.

Petroleum Business Review

Evaluating the Asymmetric Causal Relationship between Hydrocarbon products Consumption and Economic Growth in Iran

References

References

Volume 4, Issue 4 - Serial Number 13
October 2020
Pages 61-75

Evaluating the Asymmetric Causal Relationship between Hydrocarbon products Consumption and Economic Growth in Iran

References

References

Volume 4, Issue 4 - Serial Number 13October 2020Pages 61-75

Volume 4, Issue 4 - Serial Number 13
October 2020
Pages 61-75