Time-frequency Relationship between Innovation and Energy Demand in Pakistan: Evidence from Wavelet Coherence Analysis

Muhammad Salman Shabbir, Mohd Noor Mohd Shariff, Muzaffar Asad, Rabia Salman and Israr Ahmad
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Muhammad Salman Shabbir: School of Business Management, University Utara Malaysia, Malaysia
Mohd Noor Mohd Shariff: College of Business, University Utara Malaysia, Malaysia,
Muzaffar Asad: School of Accounting and Finance, Faculty of Management Studies, University of Central Punjab, Lahore, Pakistan
Rabia Salman: School of Business Management, University Utara Malaysia, Malaysia,
Israr Ahmad: School of Business Management, University Utara Malaysia, Malaysia

International Journal of Energy Economics and Policy, 2018, vol. 8, issue 5, 251-258

Abstract: This study examines the empirical relationship of innovation and energy demand by wavelet transform context. This innovative technique allowed the decomposition time-series of different time-frequency domains. The continuous wavelet and the wavelet coherence power spectrum is adopted in this study. The relationship between innovation and energy is investigated by using the annual data of Pakistan, from 1997 to 2016 by using three proxies of innovation which includes research & development expenditures, high technology exports, and the number of registered patent by residents. The overall results of the wavelet coherency propose that the measures of innovation are beneficial to bring change in the demand of energy in Pakistan in the long-run period. Furthermore, the results suggested that the technology-oriented innovations have reached to the level of bringing a notable reduction in the level of energy consumption in Pakistan.

Keywords: Technology innovation; energy; wavelet coherence; continuous wavelet transform (search for similar items in EconPapers)
JEL-codes: K32 O33 P18 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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