Understanding Energy Poverty Through the Perspective of Trade Openness and Foreign Direct Investment: An Empirical Case for Selected Latin American Countries

Energy poverty (EP) is still one of the critical problems for many countries. For this purpose, we try to assess whether trade openness (TO) and foreign direct investment (FDI) are associated with EP for the panel sample of Belize, Bolivia, Honduras, Mexico, Nicaragua, Panama, and Peru, spanning the period 1992-2020. The panel vector autoregression (PVAR) estimation results indicate that economic growth, TO, and FDI inflow reduce EP by increasing access to electricity in these countries. Further, PVAR Granger causality findings show feedback causality linkage between EP and TO, EP and FDI inflow, economic growth and TO, and economic growth and FDI inflow. Moreover, the outcomes indicate that a bidirectional causality exists from economic growth to EP and from TO to FDI inflow.