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Does the level of energy intensity matter in the effect of energy consumption on the growth of transition economies? Evidence from dynamic panel threshold analysis

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  • Aydin, Celil
  • Esen, Ömer

Abstract

This study investigates whether the effect of energy consumption on economic growth differs by the level of energy intensity. We employ an advanced dynamic panel threshold regression model to test for the “threshold” level of energy intensity that has an asymmetrical energy consumption effect on economic growth; we consider 12 Commonwealth of Independent States countries over the period 1991–2013. The estimated panel threshold regression model suggests 0.44% as the threshold level of energy intensity. Energy consumption above this level significantly retards economic growth, whereas energy consumption below the level is found to have a statistically significant positive effect on economic growth. Thus, when the threshold level of energy intensity (one of the important indicators of energy efficiency) is exceeded, energy consumption significantly hinders growth. If policy makers pay more attention to energy intensity while formulating new energy policies, substantial gains can be achieved in low energy intensity environments.

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  • Aydin, Celil & Esen, Ömer, 2018. "Does the level of energy intensity matter in the effect of energy consumption on the growth of transition economies? Evidence from dynamic panel threshold analysis," Energy Economics, Elsevier, vol. 69(C), pages 185-195.
    • Handle: RePEc:eee:eneeco:v:69:y:2018:i:c:p:185-195
    DOI: 10.1016/j.eneco.2017.11.010
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    More about this item

    Keywords

    Dynamic panel threshold analysis; Energy consumption; Economic growth; Energy intensity;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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