ENERGY CONSUMPTION IN WEST AFRICA: THE ROLE OF TECHNOLOGICAL INNOVATION, TRADE OPENNESS AND ECONOMIC GROWTH

Abstract

The study examines the effect of technological innovation, trade openness, economic growth, on energy consumption. The main objective is to investigate the short-run and long-run impact of the independent variables on energy consumption for West African economies. The study aims to determine the causal relationship between the variables and identify the heterogeneity of energy consumption among the observed variables. The study employed a second-generation heterogeneous method of analysis using the long run panel cointegration estimators from 1984 to 2020 while utilizing the Dumitrescu-Hurlin panel causality. The results indicated the existence of long-term relationships between all study variables. The empirical evidence indicates that technological innovation and economic growth positively affect energy consumption, while trade openness remains inversely linked with energy consumption. The model two's empirical outcome reveals the interplay between technological innovation, economic growth, and trade openness yields a positive conclusion that holds throughout the short-term and long-term periods. Thus, empirical results lend credence to the scale effect's validity as a causal factor between innovation and trade openness