Natural gas consumption and economic growth nexus: an investigation for France

Farhani, Sahbi and Rahman, Mohammad Mafizur (2019) Natural gas consumption and economic growth nexus: an investigation for France. International Journal of Energy Sector Management, 14 (2). pp. 261-284. ISSN 1750-6220


Abstract

Purpose – The purpose of this study is to investigate the relationship between natural gas consumption and economic growth of France.

Design/methodology/approach – To analyze the relationship an extended Cobb-Douglas production function is used. The ARDL bounds testing approach is applied to test the existence of the long run relationship between the series. The VECM Granger causality approach is implemented to detect the direction of causal relation between the variables.

Findings – The results show that variables are cointegrated for the long run relationship. They also indicate that natural gas consumption, exports, capital and labor are the contributing factors to economic growth in France. The causality analysis indicates that feedback hypothesis is validated between gas consumption and economic growth. The bidirectional causality is also found between exports and economic growth, gas consumption and exports, and capital and gas consumption.

Research limitations/implications – The feedback hypothesis between gas consumption and economic growth implies that adoption of energy conservation policies should be discouraged; rather gas consumption and economic growth policies should be implemented jointly.

Originality/value – This study is an original work for France, showing the results of the relationship between natural gas consumption and economic growth. In line with the results of this study, new direction for policy makers is opened up to formulate a comprehensive energy policy to sustain long term economic growth in France.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to Published version in accordance with the copyright policy of the publisher.
Faculty/School / Institute/Centre: Historic - Faculty of Business, Education, Law and Arts - School of Commerce (1 Jul 2013 - 17 Jan 2021)
Faculty/School / Institute/Centre: Historic - Faculty of Business, Education, Law and Arts - School of Commerce (1 Jul 2013 - 17 Jan 2021)
Date Deposited: 29 Jun 2020 02:10
Last Modified: 20 Jul 2020 03:36
Uncontrolled Keywords: natural gas consumption; economic growth; exports; France; ARDL bounds testing approach
Fields of Research (2008): 14 Economics > 1402 Applied Economics > 140205 Environment and Resource Economics
14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
14 Economics > 1403 Econometrics > 140305 Time-Series Analysis
Fields of Research (2020): 38 ECONOMICS > 3801 Applied economics > 380105 Environment and resource economics
44 HUMAN SOCIETY > 4404 Development studies > 440499 Development studies not elsewhere classified
38 ECONOMICS > 3802 Econometrics > 380205 Time-series analysis
Socio-Economic Objectives (2008): B Economic Development > 85 Energy > 8501 Energy Exploration > 850103 Oil and Gas Exploration
Identification Number or DOI: https://doi.org/10.1108/IJESM-07-2019-0005
URI: http://eprints.usq.edu.au/id/eprint/38648

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