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The role of human capital in energy-growth nexus: an international evidence

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  • Zheng Fang

    (Singapore University of Social Sciences)

  • Jiang Yu

    (Wuhan University)

Abstract

This study examines the role of human capital and the Granger causal relationship between energy and economic growth using data from 56 countries over a period of 1970–2014 on the basis of three perspectives—energy trade status, stages of economic development, and geophysical locations. Through continuously updated fully modified estimates that allow for cross-sectional dependence, we find that energy is an important factor input to economic growth, and the output elasticity with respect to energy ranges between 0.1 and 0.5 in various subsamples. Energy is a complement to human capital, and the growth-driving effect of energy is evidenced to be enhanced by human capital development. Furthermore, the bootstrapped panel Granger causality test results suggest that energy Granger causes economic growth in energy-exporting, high-income, and American countries, and therefore, energy conservation policies are more appropriate in energy-importing, middle-income and non-American countries. Based on the results, policy synergies between energy and human capital and multilateral cooperation in promoting energy efficiency should be emphasized.

Suggested Citation

  • Zheng Fang & Jiang Yu, 2020. "The role of human capital in energy-growth nexus: an international evidence," Empirical Economics, Springer, vol. 58(3), pages 1225-1247, March.
  • Handle: RePEc:spr:empeco:v:58:y:2020:i:3:d:10.1007_s00181-018-1559-8
    DOI: 10.1007/s00181-018-1559-8
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    Keywords

    Cross-sectional dependence; Bootstrap panel Granger causality; Human capital; Energy-growth nexus; Global countries;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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