Nightlights and economic activity: a comparative analysis of 20 african high-income and group of G20 countries

Nightlights are frequently used to evaluate the effects of shocks and interventions as well as the area economic performance. GDP is used as a standard in validation studies, and outdated data from the Defense Meteorological Satellite Program is frequently used. However, smaller spatial units are increasingly the focus of investigation. This study aims to investigate the casual links between nightlights and economic activity in 20 African High-income countries and Group of G20 countries for the time period from 2000 to 2023. The long-run relationship has been estimated using the PMG-panel ARDL technique and D-H causality test. The empirical results of PMG-panel ARDL technique show that nightlights has significant and positive impact on economic activity at a 1% statistical level in both panels in the long-run. The impact of nightlights is more evident in Group of G20 countries, this contrasts with 20 high-income African nations. The results of D-H causality test show that a bidirectional causality was found between total nightlights and economic activity in Group of Twenty countries and a unidirectional causal relationship was found from nightlights to GDP in Twenty (G20) African High-income countries. In general, we find minimal evidence of meaningful correlations between GDP for individual African nations and nighttime data. As a result, we discover that economic activity and Nightlights in the Group of G20 countries are strongly correlated, owing to investment promotion policies that strive to advance regional development day and night.