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Does remittance inflow stimulate electricity consumption in India? An empirical insight

Does remittance inflow stimulate electricity consumption in India? An empirical insight The purpose of this paper is to examine whether remittance inflow stimulate electricity consumption in India with other macroeconomic variables such as FDI, trade openness and urbanization in energy demand function from 1975–2017.Design/methodology/approachWe have applied structural break and co-integration tests for stationarity and long-run relationship between the variables. The Toda–Yamamatoo causality is employed for investigation of causal relationship between the variables, and robustness of causality linkages is also tested by applying innovative accounting approach (IAA).FindingsOur empirical analysis shows there is presence of long-run relationship among the variables. We find that remittance inflows stimulate electricity consumption in India. Industrialization is positively linked with electricity demand. However, trade openness declines the electricity consumption, but urbanization increases it. Furthermore, remittances inflows cause electricity consumption.Originality/valueOn the basis of findings, we conclude that due to positive impacts of remittances inflows, trade openness and urbanization, policymakers in the Indian economy need to be careful while designing sustainable environment policy. Otherwise, any sustainable environment policy in the name of protecting green environment will hamper the growth of remittance inflows, urbanization and FDI. If this exists, it may be argued that sustainable growth in India will not be possible in the face of sustainable environment policy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png South Asian Journal of Business Studies Emerald Publishing

Does remittance inflow stimulate electricity consumption in India? An empirical insight

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2398-628X
DOI
10.1108/sajbs-05-2020-0158
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to examine whether remittance inflow stimulate electricity consumption in India with other macroeconomic variables such as FDI, trade openness and urbanization in energy demand function from 1975–2017.Design/methodology/approachWe have applied structural break and co-integration tests for stationarity and long-run relationship between the variables. The Toda–Yamamatoo causality is employed for investigation of causal relationship between the variables, and robustness of causality linkages is also tested by applying innovative accounting approach (IAA).FindingsOur empirical analysis shows there is presence of long-run relationship among the variables. We find that remittance inflows stimulate electricity consumption in India. Industrialization is positively linked with electricity demand. However, trade openness declines the electricity consumption, but urbanization increases it. Furthermore, remittances inflows cause electricity consumption.Originality/valueOn the basis of findings, we conclude that due to positive impacts of remittances inflows, trade openness and urbanization, policymakers in the Indian economy need to be careful while designing sustainable environment policy. Otherwise, any sustainable environment policy in the name of protecting green environment will hamper the growth of remittance inflows, urbanization and FDI. If this exists, it may be argued that sustainable growth in India will not be possible in the face of sustainable environment policy.

Journal

South Asian Journal of Business StudiesEmerald Publishing

Published: Feb 16, 2022

Keywords: Energy demand; Remittances inflows; Urbanization; Trade openness; India; C32; F24; F43

References