A Time Varying Coefficient Approach to the Renewable and Non-Renewable Electricity Consumption-Growth Nexus: Evidence from a Panel of Emerging Market Economies

This study extends the investigation of the relationship between renewable and non-renewable electricity consumption and economic growth for 16 emerging market economies within a time-varying coefficient cointegration model spanning the period 1990-2011. The standard panel cointegration tests with fixed coefficients indicate that there is a stable long-run equilibrium relationship between real gross domestic product, renewable electricity consumption, non-renewable electricity consumption, real gross fixed capital formation, and the labor force. However, the time-varying coefficient cointegration tests show that the stability of the long-run relationship is rejected with the coefficient for non-renewable electricity consumption declining over time while the coefficient for renewable electricity consumption rising.