IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v39y2014icp134-143.html
   My bibliography  Save this article

Trends and developments in long-term steel demand – The intensity-of-use hypothesis revisited

Author

Listed:
  • Wårell, Linda

Abstract

Considering the past few years rapid increase in the demand for minerals and metals, mainly stemming from the strong economic growth in China and India, an understanding of the historical development of steel demand is of importance. The purpose of this paper is to analyze the trends and developments of steel consumption in the world by applying the so-called Intensity-of-Use (IoU) method. The empirical analysis is performed using steel consumption and GDP (in constant 2005 US Dollars) data for 61 countries over 42 years. The results show that the IoU hypothesis does not hold for the whole panel, but when dividing the sample into three income groups we find that the IoU hypothesis holds for the Middle income group, indicating that the countries in this income group have experienced the move from an industrialization phase towards a more service based economy in the time period investigated. However, when taking into account time series properties and applying panel unit root tests, the variables are confirmed as non-stationary. A panel cointegration test shows further that the variables are cointegrated, and an ECM model has been performed to test the IoU hypothesis. The results confirm that the IoU hypothesis holds for the Middle income group. Regarding the estimated turning point this is identified at a GDP per capita level of about 19,000 US. There are thus many countries that are far from the level of GDP per capita when steel IoU starts to decline. However, conclusions regarding the turning point should be made with caution.

Suggested Citation

  • Wårell, Linda, 2014. "Trends and developments in long-term steel demand – The intensity-of-use hypothesis revisited," Resources Policy, Elsevier, vol. 39(C), pages 134-143.
    • Handle: RePEc:eee:jrpoli:v:39:y:2014:i:c:p:134-143
    DOI: 10.1016/j.resourpol.2013.12.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420713001207
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2013.12.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Humphreys, David, 2010. "The great metals boom: A retrospective," Resources Policy, Elsevier, vol. 35(1), pages 1-13, March.
    2. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    3. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    4. Antonio Focacci, 2007. "Empirical analysis of the relationship between total consumption‐GDP ratio and per capita income for different metals," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 34(9), pages 612-636, August.
    5. Ignacio Guzman, Juan & Nishiyama, Takashi & Tilton, John E., 2005. "Trends in the intensity of copper use in Japan since 1960," Resources Policy, Elsevier, vol. 30(1), pages 21-27, March.
    6. Narayan, Paresh Kumar & Narayan, Seema, 2010. "Carbon dioxide emissions and economic growth: Panel data evidence from developing countries," Energy Policy, Elsevier, vol. 38(1), pages 661-666, January.
    7. Jaunky, Vishal Chandr, 2012. "Is there a material Kuznets curve for aluminium? evidence from rich countries," Resources Policy, Elsevier, vol. 37(3), pages 296-307.
    8. Roger Perman & David I. Stern, 2003. "Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(3), pages 325-347, September.
    9. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    10. Roberts, Mark C., 1996. "Metal use and the world economy," Resources Policy, Elsevier, vol. 22(3), pages 183-196, September.
    11. Jaunky, Vishal Chandr, 2011. "The CO2 emissions-income nexus: Evidence from rich countries," Energy Policy, Elsevier, vol. 39(3), pages 1228-1240, March.
    12. Boum-Jong Choe, 1991. "Global trends in raw materials consumption," Policy Research Working Paper Series 804, The World Bank.
    13. Tcha, M. & Takashina, G., 2002. "Is world metal consumption in disarray?," Resources Policy, Elsevier, vol. 28(1-2), pages 61-74.
    14. Canas, Angela & Ferrao, Paulo & Conceicao, Pedro, 2003. "A new environmental Kuznets curve? Relationship between direct material input and income per capita: evidence from industrialised countries," Ecological Economics, Elsevier, vol. 46(2), pages 217-229, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jaunky, Vishal Chandr, 2012. "Is there a material Kuznets curve for aluminium? evidence from rich countries," Resources Policy, Elsevier, vol. 37(3), pages 296-307.
    2. Crompton, Paul, 2015. "Explaining variation in steel consumption in the OECD," Resources Policy, Elsevier, vol. 45(C), pages 239-246.
    3. Ehigiamusoe, Kizito Uyi & Lean, Hooi Hooi & Smyth, Russell, 2020. "The moderating role of energy consumption in the carbon emissions-income nexus in middle-income countries," Applied Energy, Elsevier, vol. 261(C).
    4. Moutinho, Victor & Varum, Celeste & Madaleno, Mara, 2017. "How economic growth affects emissions? An investigation of the environmental Kuznets curve in Portuguese and Spanish economic activity sectors," Energy Policy, Elsevier, vol. 106(C), pages 326-344.
    5. Destek, Mehmet & Sinha, Avik, 2020. "Renewable, non-renewable energy consumption, economic growth, trade openness and ecological footprint: Evidence from organisation for economic Co-operation and development countries," MPRA Paper 104246, University Library of Munich, Germany, revised 2020.
    6. Harimukti Wandebori & Murtyastanto, 2023. "The Implication of Steel-Intensity-of-Use on Economic Development," Sustainability, MDPI, vol. 15(16), pages 1-22, August.
    7. Kassouri, Yacouba & Alola, Andrew Adewale & Savaş, Savaş, 2021. "The dynamics of material consumption in phases of the economic cycle for selected emerging countries," Resources Policy, Elsevier, vol. 70(C).
    8. Ozcan, Burcu, 2013. "The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: A panel data analysis," Energy Policy, Elsevier, vol. 62(C), pages 1138-1147.
    9. Lau, Lin-Sea & Choong, Chee-Keong & Ng, Cheong-Fatt & Liew, Feng-Mei & Ching, Suet-Ling, 2019. "Is nuclear energy clean? Revisit of Environmental Kuznets Curve hypothesis in OECD countries," Economic Modelling, Elsevier, vol. 77(C), pages 12-20.
    10. Dorothée Charlier & Florian Fizaine, 2020. "Does Becoming Richer Lead to a Reduction in Natural Resource Consumption? An Empirical Refutation of the Kuznets Material Curve," Working Papers 2020.05, FAERE - French Association of Environmental and Resource Economists.
    11. Le, Thai-Ha & Chang, Youngho & Park, Donghyun, 2016. "Trade openness and environmental quality: International evidence," Energy Policy, Elsevier, vol. 92(C), pages 45-55.
    12. Razzaq, Asif & Ajaz, Tahseen & Li, Jing Claire & Irfan, Muhammad & Suksatan, Wanich, 2021. "Investigating the asymmetric linkages between infrastructure development, green innovation, and consumption-based material footprint: Novel empirical estimations from highly resource-consuming economi," Resources Policy, Elsevier, vol. 74(C).
    13. Fernandez, Viviana, 2018. "Mineral commodity consumption and intensity of use re-assessed," International Review of Financial Analysis, Elsevier, vol. 59(C), pages 1-18.
    14. Muhammad Bilal Khan & Hummera Saleem & Malik Shahzad Shabbir & Xie Huobao, 2022. "The effects of globalization, energy consumption and economic growth on carbon dioxide emissions in South Asian countries," Energy & Environment, , vol. 33(1), pages 107-134, February.
    15. Pablo-Romero, M.P. & Cruz, L. & Barata, E., 2017. "Testing the transport energy-environmental Kuznets curve hypothesis in the EU27 countries," Energy Economics, Elsevier, vol. 62(C), pages 257-269.
    16. María del P. Pablo-Romero ,, & Rafael Pozo-Barajas & Javier Sánchez-Rivas, 2017. "Relationships between Tourism and Hospitality Sector Electricity Consumption in Spanish Provinces (1999–2013)," Sustainability, MDPI, vol. 9(4), pages 1-12, March.
    17. Zheng Fang & Bihong Huang & Zhuoxiang Yang, 2020. "Trade openness and the environmental Kuznets curve: Evidence from Chinese cities," The World Economy, Wiley Blackwell, vol. 43(10), pages 2622-2649, October.
    18. Mehdi Ben Jebli & Montassar Kahia, 2020. "The interdependence between CO2 emissions, economic growth, renewable and non-renewable energies, and service development: evidence from 65 countries," Climatic Change, Springer, vol. 162(2), pages 193-212, September.
    19. Vo, Duc, 2019. "The Impact of Foreign Direct Investment on Environment Degradation: Evidence from Emerging Markets in Asia," MPRA Paper 103292, University Library of Munich, Germany.
    20. Mrabet, Zouhair & Alsamara, Mouyad & Mimouni, Karim & Mnasri, Ayman, 2021. "Can human development and political stability improve environmental quality? New evidence from the MENA region," Economic Modelling, Elsevier, vol. 94(C), pages 28-44.

    More about this item

    Keywords

    Intensity-of-Use; Steel demand; Economic growth; Panel unit root; Panel cointegration;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:39:y:2014:i:c:p:134-143. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.