IDEAS home Printed from https://ideas.repec.org/a/spr/epolin/v52y2025i1d10.1007_s40812-024-00326-z.html
   My bibliography  Save this article

How sensitive are industrial demand and supply to energy price shocks

Author

Listed:
  • Humera Iram

    (Air University)

  • Abdul Rahim Ridzuan

    (Universiti Teknologi MARA
    Universiti Teknologi MARA
    Universiti Malaysia Sabah
    Universiti Teknologi MARA)

Abstract

This paper presents a case study to address the sensitivity of industrial demand and supply to energy price shocks by examining these responses for selected eleven large-scale manufacturing industries in Pakistan. The study employed the Structural Vector Autoregressive (SVAR) approach to investigate the sensitivity, using monthly data from July 2008 to June 2020. Due to the heterogeneous nature of these industries, a sophisticated strategy was adopted, with specialized models developed for each industry. The analysis results provide a novel finding about the dynamic of industrial demand and supply resulting from energy price shocks. The pattern of industries' response to energy price shocks has a positive and dominating impact on industrial supply. The consumer's demand decision had a dominant effect on industries like textile, petroleum, and food. For these industries, energy price shocks mainly reduce demand by delaying the decision to purchase the goods. The study shed light on the economies' resilience and vulnerability to energy price shocks associated with economic agents' decisions. It reveals that energy price shocks have a dominant impact on the supply side for energy-intensive industries and the demand side in other sectors.

Suggested Citation

  • Humera Iram & Abdul Rahim Ridzuan, 2025. "How sensitive are industrial demand and supply to energy price shocks," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(1), pages 221-239, March.
    • Handle: RePEc:spr:epolin:v:52:y:2025:i:1:d:10.1007_s40812-024-00326-z
    DOI: 10.1007/s40812-024-00326-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40812-024-00326-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40812-024-00326-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Energy prices; Demand; Supply; Industries; SVAR;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:epolin:v:52:y:2025:i:1:d:10.1007_s40812-024-00326-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.