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How will globalization contribute to reduce energy consumption?

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  • Huang, Zhilin
  • Zhang, Hong
  • Duan, Hongbo

Abstract

This paper examines the influence of globalization on energy consumption by employing a panel error correction model with cross-sectional dependence. The empirical results uncover an inverted U-shaped relationship between globalization and energy consumption in the long run, i.e., energy consumption will increase before a certain threshold of globalization arrives then it begins to reduce. Furthermore, there exists nonlinear threshold effect of financial development on this inverted U-shaped relationship. The findings therefore suggest that policy makers should pay more attention on enhancement of globalization when engaging substantial energy consumption control strategy and put formidable emphasis on the roles of financial development.

Suggested Citation

  • Huang, Zhilin & Zhang, Hong & Duan, Hongbo, 2020. "How will globalization contribute to reduce energy consumption?," Energy, Elsevier, vol. 213(C).
    • Handle: RePEc:eee:energy:v:213:y:2020:i:c:s0360544220319320
    DOI: 10.1016/j.energy.2020.118825
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    More about this item

    Keywords

    Globalization; Energy consumption; Financial development; Panel error correction model; Cross-sectional dependence;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F30 - International Economics - - International Finance - - - General
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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