How strong is the causal relationship between globalization and energy consumption in developed economies? A country-specific time-series and panel analysis

Muhammad Shahbaz, Syed Jawad Hussain Shahzad, Mantu Mahalik () and Perry Sadorsky

Applied Economics, 2018, vol. 50, issue 13, 1479-1494

Abstract: We examine the causal relationship between globalization, economic growth and energy consumption for 25 developed economies using both time series and panel data techniques for the period 1970–2014. Due to the presence of cross-sectional dependence in the panel (countries from Asia, North America, Western Europe and Oceania), we employ the cross-sectional augmented IPS test to ascertain unit root properties. The cointegration test results indicate the presence of a long-run association between globalization, economic growth and energy consumption. Long-run heterogeneous panel elasticities are estimated through the common correlated effects mean group estimator and the augmented mean group estimator. The empirical results reveal that, for most countries, globalization increases energy consumption. In the USA and UK, globalization is negatively correlated with energy consumption. The causality analysis indicates the presence of the globalization-driven energy consumption hypothesis. This empirical analysis suggests insightful policy guidelines for policy makers using globalization as an economic tool to utilize energy efficiently for sustainable economic development in the long run.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (57)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2017.1366640 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: How Strong is the Causal Relationship between Globalization and Energy Consumption in Developed Economies? A Country-Specific Time-Series and Panel Analysis (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:50:y:2018:i:13:p:1479-1494

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2017.1366640

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().