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Further evidence on the trade-energy consumption nexus in OECD countries

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  • Topcu, Mert
  • Payne, James E.

Abstract

The previous literature on the impact of trade on energy consumption has yielded inconclusive results. However, recent studies provide evidence of a nonlinear relationship between trade and energy consumption. Unlike previous studies, we employ a panel framework with allowance for heterogeneity and cross-sectional dependence to investigate the trade-energy consumption nexus for OECD countries for the period 1990–2015. Our results show that the impact of trade on energy consumption exhibits an inverted U-shaped pattern and the nonlinear relationship is robust to estimation methods. On the other hand, the results from linear specifications reveal the importance of cross-sectional dependence in explaining the positive role of trade on energy consumption. In addition, these impacts are consistent across different measures of trade.

Suggested Citation

  • Topcu, Mert & Payne, James E., 2018. "Further evidence on the trade-energy consumption nexus in OECD countries," Energy Policy, Elsevier, vol. 117(C), pages 160-165.
    • Handle: RePEc:eee:enepol:v:117:y:2018:i:c:p:160-165
    DOI: 10.1016/j.enpol.2018.03.007
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    More about this item

    Keywords

    F14; Q43; Energy consumption; Trade; OECD countries;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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