Does remittance inflow stimulate electricity consumption in India? An empirical insight
South Asian Journal of Business Studies
ISSN: 2398-628X
Article publication date: 22 October 2020
Issue publication date: 16 February 2022
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. (2022), "Does remittance inflow stimulate electricity consumption in India? An empirical insight", South Asian Journal of Business Studies, Vol. 11 No. 1, pp. 45-66. https://doi.org/10.1108/SAJBS-05-2020-0158
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited