An Empirical Investigation of Globalization and Energy Consumption: Evidence from Bangladesh

Globalization is referred to as a medium of the integration of national
economies across the world whereby markets of different origins
integrate and operate into a single market. Liberalization policies,
particularly with respect to international trade, are believed to attribute to
the globalization drives between nations. In addition, globalization has
empirically been associated with the global energy market development
which is a pre-requisite for development of economies across the globe.
Therefore, the aim of this study is to empirically analyse the impacts of
globalization on Bangladesh’s energy consumption. To the best of
knowledge there is no previous study addressing the effects of
globalization on energy consumption in the context of Bangladesh. The
study encompasses relevant data for a period of 36 years ranging from
1980 to 2015. As part of the methodology, the data set was tested using
Johansen Cointegration test, Granger Causality test and vector errorcorrection
model approach. The results reveal that there are long run
unidirectional causalities running from energy consumption and
globalization to economic growth. However, no long run causal
association was found to be running from globalization and energy
consumption in Bangladesh. This could be because of the existence of
price distortions in the energy market in Bangladesh whereby the
economies to engaging in the globalization processes could not boost
the per capita energy consumption in the country.

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