The long-run relationship between energy consumption and export sophistication in OECD countries

Year 2019, Volume: 21 Issue: 2, 342 - 361, 26.08.2019

Devran Şanlı

Abstract

The current research is an empirical investigation of the long-run and
causal relation between energy consumption and export sophistication. It employs the panel cointegration analysis
and cointegration regression using FMOLS and DOLS, for 31 OECD countries
covering time span 1990–2016. The results show that there is strong
bi-directional causality between variables. The energy consumption elasticities
of high technology exports are comparatively high than medium and low tech
export. The magnitude of the elasticity demonstrates that a 1% boost in energy
consumption is expected to result in 0.81% growth in high technology export share.
Moreover, any boost in a share of real investment is expected to have a
powerful impact on high and medium tech export growth. It states that energy
investment policies are expected to spur share of high technology exports in
OECD countries. This paper is a pioneering study to investigated the
relationship between energy consumption and export at the technology level.

Keywords

Export Sophistication, Energy Consumption, Panel Cointegration

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