The nexus between access to electricity and labour productivity in developing countries

Md. Samsul Alam, Mohammad Dulal Miah, Shawkat Hammoudeh and Aviral Tiwari

Energy Policy, 2018, vol. 122, issue C, 715-726

Abstract: Due to the importance of the access to electricity in enhancing the prosperity of human kinds, this paper examines the impact of this access on labour productivity in developing countries in presence of gross capital formation, FDI, financial development and economic growth. It employs the panel cointegration tests of Pedroni (2004) and Westerlund and Edgerton (2008) with the level break/shift to a data set of 56 developing countries. The results provide evidence of a long run equilibrium relationship between access to electricity and labour productivity for developing countries in presence of the control variables. Furthermore, the Dumitrescu and Hurlin (2012) heterogeneous panel non-causality test underscores a bidirectional causal relationship between these two key variables in the short-run. Based on these results, we recommend that policymakers ensure access to electricity for mass people in developing countries to increase productivity and thus to improve the living standards of their citizens. The paper also provides specific policy initiatives related to the individual control variables in order to ensure access to electricity to advance productivity growth in the majority of the people in developing countries.

Keywords: Access to electricity; Labour productivity; Developing economies, Panel cointegration; Panel causality (search for similar items in EconPapers)
JEL-codes: C13 C31 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:122:y:2018:i:c:p:715-726

DOI: 10.1016/j.enpol.2018.08.009

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