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ENERGY PRODUCTIVITY, ENERGY DEPENDENCE AND ECONOMIC GROWTH IN EXTENDED EUROPE

Year 2022, Issue: 2, 317 - 328, 29.04.2022
https://doi.org/10.51551/verimlilik.885141

Abstract

Purpose: Energy is used in all areas of production and is crucial for economic growth. This study aims to empirically analyze the relationship between energy productivity, economic growth, and energy use in 35 European countries, for the period of 1990-2015.


Methodology: European countries are divided into two groups, namely developed and developing economies. To account for structural breaks, a panel cointegration test that allows for multiple structural breaks is applied to two groups of countries.


Findings: Multiple breaks are found by the Westerlund (2006) test in the group of emerging countries, suggesting that energy policies within Europe should differ by country. Structural breaks in emerging European economies suggest that these countries are more fragile to both external and internal shocks. The results of the study also show that economic growth in developing countries increases energy dependency, while economic growth in developed European countries causes an increase in energy efficiency.

Originality: This study aims to enrich the literature in two aspects. First, it analyzes energy dependence and efficiency at the same time. Secondly, it examines developed and developing European countries in two separate sub-samples by observing structural breaks in the relationship between energy dependence, energy efficiency and growth.

References

  • Al-Iriani, M.A. (2006). “Energy-GDP Relationship Revisited: An Example from GCC Countries Using Panel Causality”, Energy Policy, 34(17), 3342-3350.
  • Apergis, N. and Payne, J.E. (2009). “Energy Consumption and Economic Growth in Central America: Evidence from a Panel Cointegration and Error Correction Model”, Energy Economics, 31(2), 211-216.
  • Bai, J. and Perron, P. (2003). “Computation and Analysis of Multiple Structural Change Models”, Journal of Applied Econometrics, 18, 1-22.
  • Benhabib, J. and Spiegel, M. (1994). “The Role of Human Capital in Economic Development Evidence from Aggregate Cross Country Data”, Journal of Monetary Economics, 34(2), 143-173,
  • Boyd, G. and Pang, J.X. (2000). “Estimating the Linkage between Energy Efficiency and Productivity”, Energy Policy, 28(5), 289-296.
  • Breitung, J. (2000). “The Local Power of Some Unit Root Tests for Panel Data”, Advances in Econometrics, 15, 161-177.
  • Chen, J. and Galbraith, J.K. (2011). “Institutional Structures and Policies in an Environment of Increasingly Scarce and Expensive Resources: A Fixed Cost Perspective”, Journal of Economic Issues, 45(2), 301-308.
  • Choi, I. (2001). “Unit root tests for panel data”, Journal of International Money and Finance, 20, 249-272.
  • Damette, O. and Seghir, M. (2013). “Energy as a Driver of Growth In Oil Exporting Countries?”, Energy Economics, 37, 193-199.
  • European Commission (2019). “Energy Prices and Costs in Europe (No. COM/2019/1final)”, Energy Union, https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52019DC0001, (Accessed Date: 01 April 2019).
  • EUROSTAT (n.d.). “Database”, http://ec.europa.eu/eurostat/data/database, (Accessed Date: 01 April 2019). Granger, C.W.J. (1969). “Investigating Causal Relations by Econometric Models and Cross-Spectral Methods”, Econometrica, 37, 424-438.
  • Hadri, K. (2000). “Testing for stationarity in heterogenous panel data”, Econometrics Journal, 3(2), 148-16.
  • Hansen, E.B. (1992). “Tests for Parameter Instability in Regressions with I(1) Process,” Journal of Business and Economic Statistics, 10 (3), 321-335.
  • Huang, B-N., Hwang, M.J., And Yang, C.W. (2008). “Causal Relationship between Energy Consumption and GDP Growth Revisited: A Dynamic Panel Data Approach”, Ecological Economics, 67(1), 41-54.
  • IEA (2019). "World Energy Statistics", IEA World Energy Statistics and Balances, https://doi.org/10.1787/data-00510-en, (Accessed Date: 06 April 2019).
  • Im, K-S., Lee, J., Tieslau, M. (2005).” Panel LM Unit-root Tests with Level Shifts”, Oxford Bulletin of Econometrics and Statistics, 67 (3), 393-419.
  • Im, K-S., Pesaran, M.H., Shin, Y. S. (2003). “Testing For Unit Root in Heterogenous Panels”, Journal of Econometrics, 115 (1), 53-74
  • Jaffe, A.B., Newell, R.G., and Stavins R.N. (2004). “Economics of Energy Efficiency.” Encyclopedia of Energy, (Editors: Cutler J. Cleveland), Elsevier, Amsterdam.
  • Jalil, A. (2014). “Energy–Growth Conundrum in Energy Exporting and Importing Countries: Evidence from Heterogeneous Panel Methods Robust to Cross-Sectional Dependence”, Energy Economics, 44, 314-324.
  • Judson, R.A., Schmalensee, R. and Stoker, T.M. (1999). “Economic Development and the Structure of the Demand for Commercial Energy.” Energy Journal 20 (2): 29–57.
  • Ketenci, N. (2013). “The Feldstein-Horioka Puzzle in Groupings of OECD Members: A panel Approach”, Research in Economics, 67, 76-87.
  • Krugman, P. (1979). “A Model of Innovation, Technology Transfer, and the World Distribution of Income”, The Journal of Political Economy, 87(2), 253-266.
  • Lee, C.C. (2005). “Energy Consumption and GDP in Developing Countries: A Cointegrated Panel Analysis”, Energy Economics, 27,415 – 427.
  • Lee, C.C. and Chang, C.P. (2005) “Structural Breaks, Energy Consumption, and Economic Growth Revisited: Evidence from Taiwan”, Energy Economics, 27(6), 857-872.
  • Lee, J., and Strazicich, M.C. (2003). “Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks”, The Review of Economics and Statistics, 85(4), 1082-1089.
  • Levin, A., Lin, C.F. and Chu, C.S.J. (2002). “Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties”, Journal of Econometrics, 108(1),1-24.
  • Maddala, G.S. and Wu S. (1999). “A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test”, Oxford Bulletin of Economics and Statistics, Special Issue (1999) 0305-9049.
  • Mehrara, M. (2007). “Energy Consumption and Economic Growth: The Case of Oil Exporting Countries”, Energy Policy, 35(5), 2939–2945.
  • Narayan, P. K. and Smyth, R. (2008). “Energy Consumption and Real GDP In G7 Countries: New Evidence from Panel Cointegration with Structural Breaks”, Energy Economics, 30(5), 2331-2341.
  • Ozturk, I. (2010). “A Literature Survey on Energy-Growth Nexus”, Energy Policy, 38(1), 340-349
  • Phillips, P. and Hansen, B. (1990). “Statistical Inference in Instrumental Variables Regression with I(1) Processes”, Review of Economic Studies, 57(1), 99-125.
  • Soytas, U. and Sari, R. (2003). “Energy Consumption and GDP: Causality Relationship in G-7 Countries and Emerging Markets”, Energy Economics, 25, 33-37.
  • The World Bank (2019). “World Development Indicators”, https://Databank.Worldbank.Org/Reports.Aspx?Source=World-Development-Indicators, (Accessed Date: 01 April 2019).
  • Wan J.A., Baylis K. B. And Mulder, P.C. (2015). “Trade-Facilitated Technology Spillovers in Energy Productivity Convergence Processes Across EU Countries”, Energy Economics, 48, 253-364.
  • Westerlund, J. (2006). “Testing for Panel Cointegration with Multiple Structural Breaks”, Oxford Bulletin of Economics & Statistics, 68(1) 101-132.
  • Zhang, X.P., Cheng, X-M., Yuan, J-H. and Gao, X-J. (2011).” Total-Factor Energy Efficiency in Developing Countries”, Energy Policy, 39(2), 644-650.

GENİŞLETİLMİŞ AVRUPA ÜLKELERİNDE ENERJİ VERİMLİLİĞİ, ENERJİ BAĞIMLILIĞI VE EKONOMİK BÜYÜME

Year 2022, Issue: 2, 317 - 328, 29.04.2022
https://doi.org/10.51551/verimlilik.885141

Abstract

Amaç: Enerji üretimin her alanında kullanılmakta ve ekonomik büyüme için çok önemlidir. Bu çalışma, 1990-2015 yılları arasında 35 Avrupa ülkesindeki ekonomik büyüme, enerji tüketimi ve enerji verimliliği ilişkisini ampirik olarak analiz etmeyi amaçlamaktadır.


Yöntem: Avrupa ülkeleri gelişmiş ve gelişmekte olan ekonomiler olarak iki ayrı gruba ayrılmıştır. Yapısal kırılmaları dikkate almak için iki ülke grubuna çoklu yapısal kırılmalı panel eşbütünleşme testi uygulanmıştır.


Bulgular: Gelişmekte olan ülkeler grubunda Westerlund(2006) test sonuçları birçok yapısal kırılma bulunması Avrupa enerji politikalarının ülkeler için ayrı olması gerektiği sonucunu çıkarmaktadır. Gelişmekte olan Avrupa ekonomilerindeki çok sayıdaki yapısal kırılma bu ekonomilerin içsel ve dışsal şoklara karşı daha kırılgan olduğunu göstermektedir. Çalışma sonuçları ayrıca gelişmekte olan ülkelerde ekonomik büyümenin enerji bağımlılığını arttırdığını, öte yandan gelişmiş Avrupa ülkelerinde ekonomik büyümenin enerji verimliliğinin artmasına sebep olduğunu göstermektedir.


Özgünlük: Bu çalışma literatürü iki açıdan zenginleştirmeyi hedeflemektedir. Öncelikle, enerji bağımlılığını ve verimliliği aynı anda incelemektedir. İkinci olarak, enerji bağımlılığı, enerji verimliliği ve büyüme ilişkisini yapısal kırılmaları gözlemleyerek gelişmiş ve gelişmekte olan Avrupa ülkelerini iki ayrı alt örneklem grubunda incelemektedir.

References

  • Al-Iriani, M.A. (2006). “Energy-GDP Relationship Revisited: An Example from GCC Countries Using Panel Causality”, Energy Policy, 34(17), 3342-3350.
  • Apergis, N. and Payne, J.E. (2009). “Energy Consumption and Economic Growth in Central America: Evidence from a Panel Cointegration and Error Correction Model”, Energy Economics, 31(2), 211-216.
  • Bai, J. and Perron, P. (2003). “Computation and Analysis of Multiple Structural Change Models”, Journal of Applied Econometrics, 18, 1-22.
  • Benhabib, J. and Spiegel, M. (1994). “The Role of Human Capital in Economic Development Evidence from Aggregate Cross Country Data”, Journal of Monetary Economics, 34(2), 143-173,
  • Boyd, G. and Pang, J.X. (2000). “Estimating the Linkage between Energy Efficiency and Productivity”, Energy Policy, 28(5), 289-296.
  • Breitung, J. (2000). “The Local Power of Some Unit Root Tests for Panel Data”, Advances in Econometrics, 15, 161-177.
  • Chen, J. and Galbraith, J.K. (2011). “Institutional Structures and Policies in an Environment of Increasingly Scarce and Expensive Resources: A Fixed Cost Perspective”, Journal of Economic Issues, 45(2), 301-308.
  • Choi, I. (2001). “Unit root tests for panel data”, Journal of International Money and Finance, 20, 249-272.
  • Damette, O. and Seghir, M. (2013). “Energy as a Driver of Growth In Oil Exporting Countries?”, Energy Economics, 37, 193-199.
  • European Commission (2019). “Energy Prices and Costs in Europe (No. COM/2019/1final)”, Energy Union, https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52019DC0001, (Accessed Date: 01 April 2019).
  • EUROSTAT (n.d.). “Database”, http://ec.europa.eu/eurostat/data/database, (Accessed Date: 01 April 2019). Granger, C.W.J. (1969). “Investigating Causal Relations by Econometric Models and Cross-Spectral Methods”, Econometrica, 37, 424-438.
  • Hadri, K. (2000). “Testing for stationarity in heterogenous panel data”, Econometrics Journal, 3(2), 148-16.
  • Hansen, E.B. (1992). “Tests for Parameter Instability in Regressions with I(1) Process,” Journal of Business and Economic Statistics, 10 (3), 321-335.
  • Huang, B-N., Hwang, M.J., And Yang, C.W. (2008). “Causal Relationship between Energy Consumption and GDP Growth Revisited: A Dynamic Panel Data Approach”, Ecological Economics, 67(1), 41-54.
  • IEA (2019). "World Energy Statistics", IEA World Energy Statistics and Balances, https://doi.org/10.1787/data-00510-en, (Accessed Date: 06 April 2019).
  • Im, K-S., Lee, J., Tieslau, M. (2005).” Panel LM Unit-root Tests with Level Shifts”, Oxford Bulletin of Econometrics and Statistics, 67 (3), 393-419.
  • Im, K-S., Pesaran, M.H., Shin, Y. S. (2003). “Testing For Unit Root in Heterogenous Panels”, Journal of Econometrics, 115 (1), 53-74
  • Jaffe, A.B., Newell, R.G., and Stavins R.N. (2004). “Economics of Energy Efficiency.” Encyclopedia of Energy, (Editors: Cutler J. Cleveland), Elsevier, Amsterdam.
  • Jalil, A. (2014). “Energy–Growth Conundrum in Energy Exporting and Importing Countries: Evidence from Heterogeneous Panel Methods Robust to Cross-Sectional Dependence”, Energy Economics, 44, 314-324.
  • Judson, R.A., Schmalensee, R. and Stoker, T.M. (1999). “Economic Development and the Structure of the Demand for Commercial Energy.” Energy Journal 20 (2): 29–57.
  • Ketenci, N. (2013). “The Feldstein-Horioka Puzzle in Groupings of OECD Members: A panel Approach”, Research in Economics, 67, 76-87.
  • Krugman, P. (1979). “A Model of Innovation, Technology Transfer, and the World Distribution of Income”, The Journal of Political Economy, 87(2), 253-266.
  • Lee, C.C. (2005). “Energy Consumption and GDP in Developing Countries: A Cointegrated Panel Analysis”, Energy Economics, 27,415 – 427.
  • Lee, C.C. and Chang, C.P. (2005) “Structural Breaks, Energy Consumption, and Economic Growth Revisited: Evidence from Taiwan”, Energy Economics, 27(6), 857-872.
  • Lee, J., and Strazicich, M.C. (2003). “Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks”, The Review of Economics and Statistics, 85(4), 1082-1089.
  • Levin, A., Lin, C.F. and Chu, C.S.J. (2002). “Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties”, Journal of Econometrics, 108(1),1-24.
  • Maddala, G.S. and Wu S. (1999). “A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test”, Oxford Bulletin of Economics and Statistics, Special Issue (1999) 0305-9049.
  • Mehrara, M. (2007). “Energy Consumption and Economic Growth: The Case of Oil Exporting Countries”, Energy Policy, 35(5), 2939–2945.
  • Narayan, P. K. and Smyth, R. (2008). “Energy Consumption and Real GDP In G7 Countries: New Evidence from Panel Cointegration with Structural Breaks”, Energy Economics, 30(5), 2331-2341.
  • Ozturk, I. (2010). “A Literature Survey on Energy-Growth Nexus”, Energy Policy, 38(1), 340-349
  • Phillips, P. and Hansen, B. (1990). “Statistical Inference in Instrumental Variables Regression with I(1) Processes”, Review of Economic Studies, 57(1), 99-125.
  • Soytas, U. and Sari, R. (2003). “Energy Consumption and GDP: Causality Relationship in G-7 Countries and Emerging Markets”, Energy Economics, 25, 33-37.
  • The World Bank (2019). “World Development Indicators”, https://Databank.Worldbank.Org/Reports.Aspx?Source=World-Development-Indicators, (Accessed Date: 01 April 2019).
  • Wan J.A., Baylis K. B. And Mulder, P.C. (2015). “Trade-Facilitated Technology Spillovers in Energy Productivity Convergence Processes Across EU Countries”, Energy Economics, 48, 253-364.
  • Westerlund, J. (2006). “Testing for Panel Cointegration with Multiple Structural Breaks”, Oxford Bulletin of Economics & Statistics, 68(1) 101-132.
  • Zhang, X.P., Cheng, X-M., Yuan, J-H. and Gao, X-J. (2011).” Total-Factor Energy Efficiency in Developing Countries”, Energy Policy, 39(2), 644-650.
There are 36 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Natalya Ketenci 0000-0002-7299-2833

Ayşe Sevencan 0000-0001-8867-0874

Publication Date April 29, 2022
Submission Date February 22, 2021
Published in Issue Year 2022 Issue: 2

Cite

APA Ketenci, N., & Sevencan, A. (2022). ENERGY PRODUCTIVITY, ENERGY DEPENDENCE AND ECONOMIC GROWTH IN EXTENDED EUROPE. Verimlilik Dergisi(2), 317-328. https://doi.org/10.51551/verimlilik.885141

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