An Empirical Analysis Of The Impact Of Financial Capital On Supply And Demand Of Electricity In Pakistan

Pakistan is presently facing vicious energy crises issues,and energy supply industries are subtle by contemporary economic condition of the country and circular debt has caused the oil and gas production above 80%,minimum utilization of coal and hydro resources and unexploited power generation aptitude place several important boundaries to electricity and energy shortfall.Moreover,the reduction of available exploration of alternates for electricity power and energy resources and the increase in electricity power and energy prices communicate consideration of fundamental electricity use and economic development.Growth in the power and energy sector is certain in accompanying superlative economic growth.Therefore,the volatility of economic growth relies on electricity consumption.This research study considered both exploratory research design as well as a descriptive research design.Exploratory research design aims to explore what has not been previously explored,and it assumes to found new information and understanding,therefore,the research study is exploratory in nature as the impact of financial support on electricity supply and demand has been investigated.Secondly,descriptive research design is used to develop theory,determine issues with prevailing practice,supporting prevailing practice,and producing knowledge.The deductive and quantitative research approaches are used since hypotheses regarding financial support variable and supply and demand variables are tested.Numerical data on each variable was collected from authentic websites,i.e.,The World Bank,Asian Development Bank,National Transmission and Dispatch Company Pakistan and Economic Survey of Pakistan.Time series data is used as it represents data in sequential points at subsequent times and data is collected from 1981 to 2016 for the period of 36 years.Data analysis is conducted by using several statistical tools such as descriptive statistics,correlation analysis,hierarchical regression,and partial least square(PLS)regression analysis.Results of the study revealed that foreign investment,IPPs,and GDP per capita has a significant and positive impact on hydro projects,solar power projects,fossil fuel projects,and thermal power projects of electricity,as well as electricity consumption of agriculture,industrial,commercial,and domestic sectors.The study also recommends that the government should have a liberal foreign economic policy to attract foreign investment in the country to fill the electricity supply and demand gap.Secondly,the numbers of IPPs should be increased and as a result of liberal policy investments in infrastructure,power,and energy,education,transport,etc.will result in increasing GDP per capita of the country.