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Decomposing energy demand across BRIIC countries

Morakinyo Adetutu (), Anthony J. Glass and Thomas G. Weyman-Jones

Energy Economics, 2016, vol. 54, issue C, 396-404

Abstract: Energy plays an important role within the production technology of fast emerging economies, such that firms' reaction to changes in energy prices provides useful information on factor productivity and factor intensity, as well as the likely outcome of energy policy initiatives, among other things. Drawing on duality theory, this paper decomposes changes in energy demand into substitution and output effects using annual sector-level production data for Brazil, Russia, India, Indonesia and China (BRIIC) for the period 1995–2009. Unlike previous studies, this study analyzed the economic properties of the underlying production technology. Results indicate that changes in energy demand are strongly dominated by substitution effects. More importantly, an intriguing finding that emerges from our analysis is the role of economies of scale and factor accumulation, as opposed to technical progress, in giving rise to the growth performance of sampled economies.

Keywords: BRIIC countries; Input demand; Duality; Production technology; Translog cost function; Slutsky decomposition (search for similar items in EconPapers)
JEL-codes: C3 D22 O40 Q40 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:54:y:2016:i:c:p:396-404

DOI: 10.1016/j.eneco.2016.01.001

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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