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Do Foreign Direct Investment and Trade lead to Lower Energy Intensity? Evidence from Selected African Countries

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  • Yaya Keho

    (Department of Applied Economics, Ecole Nationale Sup rieure de Statistique et d Economie Appliqu e Abidjan)

Abstract

The aim of this study is to examine the impact of foreign direct investment (FDI) and trade on energy intensity in a sample of six sub-Saharan countries. It applies the bounds testing approach to co-integration and Granger causality analysis to annual data covering the time period from 1970 to 2011. The results indicate evidence for energy-reducing effect of FDI in Benin and Nigeria, while in Cote d Ivoire and Togo, energy efficiency declines as FDI increases. The results also indicate that energy intensity is negatively affected by imports in Cameroon, Cote d Ivoire and Togo, suggesting that trade improves energy efficiency. Results of Granger causality suggest that in the short-run, energy intensity is caused by FDI in Cote d Ivoire and Nigeria, and by imports in Cameroon and Nigeria.

Suggested Citation

  • Yaya Keho, 2016. "Do Foreign Direct Investment and Trade lead to Lower Energy Intensity? Evidence from Selected African Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 6(1), pages 1-5.
    • Handle: RePEc:eco:journ2:2016-01-01
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    References listed on IDEAS

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    Cited by:

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    2. Gyamfi, Bright Akwasi & Bein, Murad A. & Udemba, Edmund Ntom & Bekun, Festus Victor, 2021. "Investigating the pollution haven hypothesis in oil and non-oil sub-Saharan Africa countries: Evidence from quantile regression technique," Resources Policy, Elsevier, vol. 73(C).
    3. Philip Kofi Adom, 2018. "The Long‐run Effects of Political Regimes and Economic Openness on Energy Intensity," African Development Review, African Development Bank, vol. 30(4), pages 399-409, December.
    4. Muntasir Murshed, 2018. "Does Improvement in Trade Openness Facilitate Renewable Energy Transition? Evidence from Selected South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 19(2), pages 151-170, September.
    5. Daniel Balsalobre‐Lorente & Oana M. Driha & George Halkos & Shekhar Mishra, 2022. "Influence of growth and urbanization on CO2 emissions: The moderating effect of foreign direct investment on energy use in BRICS," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(1), pages 227-240, February.
    6. Yan Wu & Cong Hu & Xunpeng Shi, 2021. "Heterogeneous Effects of the Belt and Road Initiative on Energy Efficiency in Participating Countries," Energies, MDPI, vol. 14(18), pages 1-21, September.
    7. Aliyu Alhaji Jibrilla, 2018. "Does Trade Liberalization Affect Energy Saving in Nigeria?," Pakistan Journal of Humanities and Social Sciences, International Research Alliance for Sustainable Development (iRASD), vol. 6(4), pages :493-515, December.
    8. Atina Saraswati & Djoni Hartono & Witri Indriyani, 2022. "The impact of FDI on energy intensity: a spatial econometric analysis of Indonesian provinces," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 12(4), pages 853-869, December.
    9. Longe Adedayo Emmanuel & Adebayo Emmanuel Olajide & Muhammad Shehu & Adelokun Oluwole Oluniyi, 2020. "Energy Consumption and Foreign Direct Investment in Nigeria: A Structural Break Analysis," Economic Themes, Sciendo, vol. 58(2), pages 187-201, June.
    10. Fredrick Oteng Agyeman & Ma Zhiqiang & Mingxing Li & Agyemang Kwasi Sampene & Malcom Frimpong Dapaah & Emmanuel Adu Gyamfi Kedjanyi & Paul Buabeng & Yiyao Li & Saifullah Hakro & Mohammad Heydari, 2022. "Probing the Effect of Governance of Tourism Development, Economic Growth, and Foreign Direct Investment on Carbon Dioxide Emissions in Africa: The African Experience," Energies, MDPI, vol. 15(13), pages 1-24, June.
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    More about this item

    Keywords

    Energy Intensity; Foreign Direct Investment; Trade;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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