Examining the Causality of Energy Between Growth in Asian Countries: Panel Data Analysis

Abstract

This study explores the relationship between energy consumption and economic growth in 17 Asian countries using a panel framework. The findings reveal a long-run equilibrium where energy consumption positively influences GDP. In the short run, energy consumption drives economic growth, while in the long run, GDP influences energy consumption. These results highlight the immediate role of energy in economic expansion and the evolving dependence of energy use on sustained economic growth. Short-run causality indicates that energy consumption powers industrial and commercial activities, fueling GDP growth. However, in the long run, economic growth determines energy demand, as structural shifts in production and consumption influence energy needs. These findings emphasize the necessity for balanced energy policies that support economic development while ensuring sustainability. Efficient coordination among countries in implementing energy conservation policies is essential for sustainable economic progress. Regional collaboration can facilitate energy efficiency measures, technology transfers, and renewable energy adoption, mitigating the environmental impact of economic growth. Policymakers should focus on optimizing energy use while fostering economic resilience. Future research should explore sectoral variations in energy consumption and the impact of policy interventions on energy efficiency. Understanding these dynamics will enable policymakers to craft targeted strategies that balance economic expansion with environmental sustainability. By integrating energy efficiency into long-term economic planning, countries can achieve sustainable development while reducing dependency on non-renewable energy sources. The study underscores the importance of strategic energy planning to align with evolving economic structures and long-term growth objectives.