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The Determinants of Energy and Electricity Consumption in Developed and Developing Countries: International Evidence

Ioannis Dokas (), Minas Panagiotidis (), Stephanos Papadamou () and Eleftherios Spyromitros ()
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Ioannis Dokas: Department of Economics, Democritus University of Thrace, 69-100 Komotini, Greece
Minas Panagiotidis: Department of Economics, Democritus University of Thrace, 69-100 Komotini, Greece
Stephanos Papadamou: Department of Economics, University of Thessaly, 38-333 Volos, Greece

Energies, 2022, vol. 15, issue 7, 1-30

Abstract: Aim and background—As research on the energy and electricity consumption determinants yields mixed results and a multifactorial model has not yet been developed, our study aims to investigate the growth dynamics of the factors that affect energy consumption in developed and developing countries. Motivation—The current global energy crisis has led us to a thorough investigation of the determinants that are affecting it. Hypothesis—It is hypothesized that a set of macro-financial, macro-environmental, and institutional variables are factors that causally affect energy and electricity consumption in a holistic model. Μethods—This research uses the data from 109 countries within a multivariate panel framework taken during 2010–2018, through the error correction, dynamic cointegration econometric methodologies, and causality tests. Results—The results indicate a coherent model with high interpretive power (80%) and that the main determinants of energy consumption in developing countries are economic growth, investment, and winter temperature, whereas, in developed countries, the determinants are trade openness, corruption, and innovation. Conclusion—Because energy consumption and economic growth share a bilateral relationship, the conservation of energy policy measures must be implemented according to the income category in which the country is classified.

Keywords: energy consumption; economic growth; corruption; innovation; renewable energy; panel cointegration (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
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