Energy Savings via Foreign Direct Investment? - Empirical evidence from Portugal

João Cerdeira Bento

No 2011/24, Working Papers from Maastricht School of Management

Abstract: This study runs a cointegration analysis on annual data from 1980 to 2007 to investigate the relationship between primary energy consumption, economic growth and net inflows of foreign direct investment with the Engle and Granger method, Stock-Watson dynamic ordinary least squares (DOLS), the bounds testing approach to cointegration and error correction modelling. The empirical results suggest that there is a stable long run linear cointegration relationship between these three variables. While income has a large and positive influence on energy consumption, the results point to a small but negative effect of foreign direct investment (FDI) on energy consumption. As for the short-run relationship among the series, the estimation and inference in the autoregressive distributed lag error correction model (ARDL) further confirm this link. These findings have important policy implications, since the promotion of appropriate structural policies aiming at attracting foreign investment can induce energy conservation without obstructing economic growth.

Keywords: energy consumption; economic growth; foreign direct investment; cointegration (search for similar items in EconPapers)
JEL-codes: F21 Q54 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2011-11
New Economics Papers: this item is included in nep-ene and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2011-24.pdf First version, 2011 (application/pdf)

Related works:
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:msm:wpaper:2011/24

Access Statistics for this paper

More papers in Working Papers from Maastricht School of Management Contact information at EDIRC.
Bibliographic data for series maintained by Maud de By ( this e-mail address is bad, please contact ).