The Impact of Affordable and Modern Energy Availability on the Economic Growth of Countries Around the World

Elena A. Osadchenko

Siberian Federal University, Krasnoyarsk, Russia

Abstract

Energy is essential for most economic processes, as well as human life, which forms a strong link between the energy sector and national economic development. The concept of sustainable development is comprehensive and also affects the energy sector within the framework of the seventh sustainable development goal aimed at ensuring availability of affordable and modern energy. The above predetermined the purpose of this study, which is to assess the impact of the availability of affordable and modern energy on economic growth. A hypothesis is put forward that the impact of availability of affordable and modern energy on economic growth is due to the spatial location of countries. Based on the indicators of achieving the seventh sustainable development goal and GDP per capita for 2000-2021 for 164 UN members, multivariate regression models are built to empirically confirm the hypothesis in terms of the presence of influence and the selection of the best model specification. The most significant indicators of achieving the seventh sustainable development goal that determine economic growth are the share of the population with access to electricity, and energy intensity. To test the significance of spatial location, global and local Moran indices, Pesaran CD test and spatial econometric modeling are used. The geometric neighbourhood matrix is used as a weight matrix. According to the results of the study, the hypothesis is confirmed. The presence of positive spatial autocorrelation among neighbouring countries for both indicators of achieving the seventh sustainable development goal is revealed. An increase in energy intensity leads to a decrease in GDP per capita, and an increase in the share of the population with access to electricity leads to an increase. Changes in the analyzed indicators of a particular country also have twice as strong an impact on the economic growth of its neighbors than on its own. The results will be useful for international organizations and governments of countries to ensure the implementation of the seventh sustainable development goal in the interests of global economic growth.

Keywords

sustainable development; energy intensity; electrification; economic growth; Moran's index; spatial autocorrelation; spatial modeling

JEL classification

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Acknowledgements

The work was prepared based on the results of training at the Summer School "Spatial Modeling of Socio-Economic Processes", organized with the support of the Potanin Foundation (project No. ПЮФП25-0027/24).

The author is grateful to the anonymous reviewers whose valuable comments contributed to significant improvement of the work.

About Authors

Elena Alekseevna Osadchenko

Post-Graduate Student, Senior Lecturer, Department of Finance and Risk Management, Siberian Federal University, Krasnoyarsk, Russia (660041, Krasnoyarsk, Svobodny pr., 79); ORCID https://orcid.org/0000-0003-2792-4652 e-mail: eaosadchenko@mail.ru

For citation

Osadchenko, E.A. (2024). The Impact of Affordable and Modern Energy Availability on the Economic Growth of Countries Around the World. Journal of Applied Economic Research, Vol. 23, No. 4, 905-928. https://doi.org/10.15826/vestnik.2024.23.4.036

Article info

Received September 12, 2024; Revised September 27, 2024; Accepted October 4, 2024.

DOI: https://doi.org/10.15826/vestnik.2024.23.4.036

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