Further evidence on the trade-energy consumption nexus in OECD countries

Mert Topcu and James Payne

Energy Policy, 2018, vol. 117, issue C, 160-165

Abstract: The previous literature on the impact of trade on energy consumption has yielded inconclusive results. However, recent studies provide evidence of a nonlinear relationship between trade and energy consumption. Unlike previous studies, we employ a panel framework with allowance for heterogeneity and cross-sectional dependence to investigate the trade-energy consumption nexus for OECD countries for the period 1990–2015. Our results show that the impact of trade on energy consumption exhibits an inverted U-shaped pattern and the nonlinear relationship is robust to estimation methods. On the other hand, the results from linear specifications reveal the importance of cross-sectional dependence in explaining the positive role of trade on energy consumption. In addition, these impacts are consistent across different measures of trade.

Keywords: F14; Q43; Energy consumption; Trade; OECD countries (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:117:y:2018:i:c:p:160-165

DOI: 10.1016/j.enpol.2018.03.007

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