To read the full version of this content please select one of the options below:

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

Malayaranjan Sahoo (Department of Humanities and Social Sciences, National Institute of Technology (NIT) Rourkela, Rourkela, India)
Narayan Sethi (Department of Humanities and Social Sciences, National Institute of Technology (NIT) Rourkela, Rourkela, India)

South Asian Journal of Business Studies

ISSN: 2398-628X

Article publication date: 22 October 2020

Downloads
88

Abstract

Purpose

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/approach

We 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).

Findings

Our 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/value

On 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.

Keywords

Acknowledgements

The authors are grateful to the editor, associate editor and anonymous referees of the journal for their extremely useful suggestions to improve the quality of the article. Usual disclaimers apply.Funding: The authors received no financial support for the research, authorship and/or publication of this article.

Citation

Sahoo, M. and Sethi, N. (2020), "Does remittance inflow stimulate electricity consumption in India? An empirical insight", South Asian Journal of Business Studies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/SAJBS-05-2020-0158

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited