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http://dx.doi.org/10.5855/ENERGY.2019.28.2.001

An Analysis on Causalities Among GDP, Electricity Consumption, CO2 Emission and FDI Inflow in Korea  

Park, Chang-dae (Dept. of Energy Policy, Seoul National University of Science and Technology)
Kim, Sung-won (Dept. of Energy Policy, Seoul National University of Science and Technology)
Park, Jung-gu (Dept. of Energy Policy, Seoul National University of Science and Technology)
Publication Information
Journal of Energy Engineering / v.28, no.2, 2019 , pp. 1-17 More about this Journal
Abstract
This article analyzes causal relationships among gross domestic product(GDP), electricity consumption, carbon dioxide($CO_2$) emission and foreign direct investments(FDI) inflow of Korea over the period from 1976 to 2014, using unit root test, cointegration test, and vector error correction model(VECM). As the results, this article found (1) a long-run bi-directional causality between GDP and electricity consumption, which may imply a negative impact of electricity consumption-saving policy on economic growth, (2) uni-directional short- and long-run causalities running from $CO_2$ emission to GDP, and a uni-directional long-run causality running from $CO_2$ emission to electricity consumption, which can result in a negative impact of $CO_2$ emission reduction policy on economic growth and electricity consumption, (3) a uni-directional long-run causality running from FDI to GDP, and uni-directional short- and long-run causalities running from FDI to electricity consumption, which may result from relatively lower electricity prices than investing countries, (4) no causality between FDI and $CO_2$ emission, which is based on the characteristics of FDI composed of service industries. Considering the above causal relationships among the four variables, the policy implication needs to focus on the electricity demand management based on the relevant R&Ds, and on the gradual transition from fossil fuel- to renewable-energy. Adaptive policy to increase the FDI inflow is also needed.
Keywords
Economic growth; Electricity consumption; $CO_2$ emission; FDI Inflow; Korea;
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Times Cited By KSCI : 2  (Citation Analysis)
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