IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v70y2011i7p1354-1362.html
   My bibliography  Save this article

Oil consumption and economic efficiency: A comparative analysis of advanced, developing and emerging economies

Author

Listed:
  • Halkos, George E.
  • Tzeremes, Nickolaos G.

Abstract

This paper investigates the economic efficiency-oil consumption relationship in 42 countries during the period 1986-2006. In a first stage by using DEA window analysis countries' economic efficiencies are obtained. In a second stage an econometric analysis based on robust GMM estimators reveals an inverted 'U'-shape relationship between oil consumption and economic efficiency. In order to capture heterogeneities among countries' development stages the analysis has been separated into two groups (advanced economies and developing/emerging economies). The results show that advanced economies have much higher turning points compared to emerging and developing economies. It appears that oil consumption increases countries' economic efficiency. In addition the consumption patterns of oil products and its derivatives have changed through years and among countries. The different turning points from the econometric analysis indicate the dependence of oil consumption in advanced economies (higher turning points) is driven mainly by household purchasing activities and their standards of living (transport, housing and water, food, etc.). Finally, it appears that oil consumption is the main driver behind the progress of industrialization and urbanization regardless of the country's development stage.

Suggested Citation

  • Halkos, George E. & Tzeremes, Nickolaos G., 2011. "Oil consumption and economic efficiency: A comparative analysis of advanced, developing and emerging economies," Ecological Economics, Elsevier, vol. 70(7), pages 1354-1362, May.
  • Handle: RePEc:eee:ecolec:v:70:y:2011:i:7:p:1354-1362
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921-8009(11)00082-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    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. Ozturk, Ilhan & Aslan, Alper & Kalyoncu, Huseyin, 2010. "Energy consumption and economic growth relationship: Evidence from panel data for low and middle income countries," Energy Policy, Elsevier, vol. 38(8), pages 4422-4428, August.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Smulders, Sjak & de Nooij, Michiel, 2003. "The impact of energy conservation on technology and economic growth," Resource and Energy Economics, Elsevier, vol. 25(1), pages 59-79, February.
    4. Zhang, Xing-Ping & Cheng, Xiao-Mei, 2009. "Energy consumption, carbon emissions, and economic growth in China," Ecological Economics, Elsevier, vol. 68(10), pages 2706-2712, August.
    5. Mulder, Peter & de Groot, Henri L. F. & Hofkes, Marjan W., 2003. "Explaining slow diffusion of energy-saving technologies; a vintage model with returns to diversity and learning-by-using," Resource and Energy Economics, Elsevier, vol. 25(1), pages 105-126, February.
    6. Ayres, Robert, 1996. "Technology, progress and economic growth," European Management Journal, Elsevier, vol. 14(6), pages 562-575, December.
    7. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    8. Swamy, P A V B, 1970. "Efficient Inference in a Random Coefficient Regression Model," Econometrica, Econometric Society, vol. 38(2), pages 311-323, March.
    9. Halkos, George Emm. & Tzeremes, Nickolaos G., 2009. "Exploring the existence of Kuznets curve in countries' environmental efficiency using DEA window analysis," Ecological Economics, Elsevier, vol. 68(7), pages 2168-2176, May.
    10. Manuel Arellano, 1990. "Testing for Autocorrelation in Dynamic Random Effects Models," Review of Economic Studies, Oxford University Press, vol. 57(1), pages 127-134.
    11. Ayres, Robert U. & Warr, Benjamin, 2005. "Accounting for growth: the role of physical work," Structural Change and Economic Dynamics, Elsevier, vol. 16(2), pages 181-209, June.
    12. Jie Li & Robert Ayres, 2008. "Economic Growth and Development: Towards a Catchup Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(1), pages 1-36, May.
    13. Dale W. Jorgenson, 1984. "The Role of Energy in Productivity Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 11-26.
    14. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach," Ecological Economics, Elsevier, vol. 67(1), pages 41-54, August.
    15. D. Pimentel & Jennifer Gardner & Adam Bonnifield & Ximena Garcia & Julie Grufferman & Claire Horan & Julia Schlenker & Emily Walling, 2009. "Energy efficiency and conservation for individual Americans," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 11(3), pages 523-546, June.
    16. Ayres, Robert U., 1996. "Limits to the growth paradigm," Ecological Economics, Elsevier, vol. 19(2), pages 117-134, November.
    17. Ayres, Robert U. & van den Bergh, Jeroen C.J.M., 2005. "A theory of economic growth with material/energy resources and dematerialization: Interaction of three growth mechanisms," Ecological Economics, Elsevier, vol. 55(1), pages 96-118, October.
    18. Henry Tulkens & Philippe Eeckaut, 2006. "Nonparametric Efficiency, Progress and Regress Measures For Panel Data: Methodological Aspects," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 395-429, Springer.
    19. Griffin, James M & Gregory, Paul R, 1976. "An Intercountry Translog Model of Energy Substitution Responses," American Economic Review, American Economic Association, vol. 66(5), pages 845-857, December.
    20. Berndt, Ernst R & Wood, David O, 1979. "Engineering and Econometric Interpretations of Energy-Capital Complementarity," American Economic Review, American Economic Association, vol. 69(3), pages 342-354, June.
    21. Robert M. Solow, 2016. "Resources and Economic Growth," The American Economist, Sage Publications, vol. 61(1), pages 52-60, March.
    22. Warr, Benjamin & Ayres, Robert, 2006. "REXS: A forecasting model for assessing the impact of natural resource consumption and technological change on economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 17(3), pages 329-378, September.
    23. Robert Webb, 2003. "Levels of efficiency in UK retail banks: a DEA window analysis," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(3), pages 305-322.
    24. D. Pimentel & Jennifer Gardner & Adam Bonnifield & Ximena Garcia & Julie Grufferman & Claire Horan & Julia Schlenker & Emily Walling & Emily Rochon, 2009. "Energy efficiency and conservation for individual Americans," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 11(3), pages 547-547, June.
    25. Abdel Sabour, Sabry. A., 2005. "Quantifying the external cost of oil consumption within the context of sustainable development," Energy Policy, Elsevier, vol. 33(6), pages 809-813, April.
    26. Berndt, Ernst R & Wood, David O, 1975. "Technology, Prices, and the Derived Demand for Energy," The Review of Economics and Statistics, MIT Press, vol. 57(3), pages 259-268, August.
    27. Craigwell, Roland C. & Rock, Llewyn L., 1992. "Dynamic savings behaviour in an oil-dependent economy : The case of Trinidad and Tobago," Journal of Development Economics, Elsevier, vol. 39(2), pages 247-261, October.
    28. Mette Asmild & Joseph Paradi & Vanita Aggarwall & Claire Schaffnit, 2004. "Combining DEA Window Analysis with the Malmquist Index Approach in a Study of the Canadian Banking Industry," Journal of Productivity Analysis, Springer, vol. 21(1), pages 67-89, January.
    29. Soytas, Ugur & Sari, Ramazan, 2009. "Energy consumption, economic growth, and carbon emissions: Challenges faced by an EU candidate member," Ecological Economics, Elsevier, vol. 68(6), pages 1667-1675, April.
    30. Reynolds, Doug, 1998. "Entropy subsidies," Energy Policy, Elsevier, vol. 26(2), pages 113-118, February.
    31. George Emm Halkos & Nickolaos Tzeremes, 2009. "Electricity Generation and Economic Efficiency: Panel Data Evidence from World and East Asian Countries," Global Economic Review, Taylor & Francis Journals, vol. 38(3), pages 251-263.
    32. Soytas, Ugur & Sari, Ramazan & Ewing, Bradley T., 2007. "Energy consumption, income, and carbon emissions in the United States," Ecological Economics, Elsevier, vol. 62(3-4), pages 482-489, May.
    33. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    34. Bos, J.W.B. & Economidou, C. & Koetter, M. & Kolari, J.W., 2010. "Do all countries grow alike?," Journal of Development Economics, Elsevier, vol. 91(1), pages 113-127, January.
    35. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2007. "Data Envelopment Analysis," Springer Books, Springer, edition 0, number 978-0-387-45283-8.
    36. Hartman, Thomas E. & Storbeck, James E., 1996. "Input congestion in loan operations," International Journal of Production Economics, Elsevier, vol. 46(1), pages 413-421, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adewuyi, Adeolu O. & Awodumi, Olabanji B., 2017. "Renewable and non-renewable energy-growth-emissions linkages: Review of emerging trends with policy implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 275-291.
    2. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    3. Vladimir Pavlovich Klepikov & Vladimir Vladimirovich Klepikov, 2018. "Crude Oil Logistics, Production and Refining in Northern Europe," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 18-28.
    4. Alam & Paramati, 2015. "Do oil consumption and economic growth intensify environmental degradation? Evidence from developing economies," Applied Economics, Taylor & Francis Journals, vol. 47(48), pages 5186-5203, October.
    5. Nasir, Muhammad Ali & Naidoo, Lutchmee & Shahbaz, Muhammad & Amoo, Nii, 2018. "Implications of oil prices shocks for the major emerging economies: A comparative analysis of BRICS," Energy Economics, Elsevier, vol. 76(C), pages 76-88.
    6. Christos Tsirimokos & Georgios Maroulis, 2016. "Price and Income Elasticities of Demand for Crude Oil. A study of thirteen OECD and Non-OECD Countries," Bulletin of Political Economy, Bulletin of Political Economy, vol. 10(2), pages 161-180, December.
    7. Halkos, George & Tzeremes, Nickolaos, 2013. "Renewable energy consumption and economic efficiency: Evidence from European countries," MPRA Paper 44136, University Library of Munich, Germany.
    8. Arazmuradov, Annageldy, 2011. "Energy consumption and carbon dioxide environmental efficiency for former Soviet Union economies. evidence from DEA window analysis," MPRA Paper 36903, University Library of Munich, Germany, revised 24 Feb 2012.
    9. Liyin Shen & Yingli Lou & Yali Huang & Jindao Chen, 2018. "A driving–driven perspective on the key carbon emission sectors in China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 93(1), pages 349-371, August.
    10. Koengkan, Matheus & Fuinhas, José Alberto & Kazemzadeh, Emad & Osmani, Fariba & Alavijeh, Nooshin Karimi & Auza, Anna & Teixeira, Mônica, 2022. "Measuring the economic efficiency performance in Latin American and Caribbean countries: An empirical evidence from stochastic production frontier and data envelopment analysis," International Economics, Elsevier, vol. 169(C), pages 43-54.
    11. Rattaphon Wuthisatian, 2014. "Government Resource Subsidy and its Spillover Effects: Evidence from the Excessive Oil Consumption in China," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 2(1), pages 1-12.

    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. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    2. Arazmuradov, Annageldy, 2011. "Energy consumption and carbon dioxide environmental efficiency for former Soviet Union economies. evidence from DEA window analysis," MPRA Paper 36903, University Library of Munich, Germany, revised 24 Feb 2012.
    3. Halkos, George & Tzeremes, Nickolaos, 2011. "The effect of energy consumption on countries’ economic efficiency: a conditional robust non parametric approach," MPRA Paper 28692, University Library of Munich, Germany.
    4. Halkos, George E. & Tzeremes, Nickolaos G., 2009. "Economic efficiency and growth in the EU enlargement," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 847-862, November.
    5. Acheampong, Alex O., 2018. "Economic growth, CO2 emissions and energy consumption: What causes what and where?," Energy Economics, Elsevier, vol. 74(C), pages 677-692.
    6. Chen, Ping-Yu & Chen, Sheng-Tung & Hsu, Chia-Sheng & Chen, Chi-Chung, 2016. "Modeling the global relationships among economic growth, energy consumption and CO2 emissions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 420-431.
    7. Ahmad, Nisar & Aghdam, Reza FathollahZadeh & Butt, Irfan & Naveed, Amjad, 2020. "Citation-based systematic literature review of energy-growth nexus: An overview of the field and content analysis of the top 50 influential papers," Energy Economics, Elsevier, vol. 86(C).
    8. Ali Raza Cheema & Attiya Yasmin Javid, 2015. "The Relationship between Disaggregate Energy Consumption, Economic Growth and Environment for Asian Developing Economies," PIDE-Working Papers 2015:115, Pakistan Institute of Development Economics.
    9. Halkos, George Emm. & Tzeremes, Nickolaos G., 2009. "Exploring the existence of Kuznets curve in countries' environmental efficiency using DEA window analysis," Ecological Economics, Elsevier, vol. 68(7), pages 2168-2176, May.
    10. Tiba, Sofien & Omri, Anis, 2017. "Literature survey on the relationships between energy, environment and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1129-1146.
    11. Kais, Saidi & Sami, Hammami, 2016. "An econometric study of the impact of economic growth and energy use on carbon emissions: Panel data evidence from fifty eight countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1101-1110.
    12. Sofien, Tiba & Omri, Anis, 2016. "Literature survey on the relationships between energy variables, environment and economic growth," MPRA Paper 82555, University Library of Munich, Germany, revised 14 Sep 2016.
    13. Jean Vasile Andrei & Mihai Mieila & Mirela Panait, 2017. "The impact and determinants of the energy paradigm on economic growth in European Union," PLOS ONE, Public Library of Science, vol. 12(3), pages 1-17, March.
    14. Muhammad, Bashir, 2019. "Energy consumption, CO2 emissions and economic growth in developed, emerging and Middle East and North Africa countries," Energy, Elsevier, vol. 179(C), pages 232-245.
    15. Klodian Muço & Enzo Valentini & Stefano Lucarelli, 2021. "The Relationships between GDP growth, Energy Consumption, Renewable Energy Production and CO2 Emissions in European Transition Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 362-373.
    16. Antonakakis, Nikolaos & Chatziantoniou, Ioannis & Filis, George, 2015. "Energy Consumption, CO2 Emissions, and Economic Growth: A Moral Dilemma," MPRA Paper 67422, University Library of Munich, Germany.
    17. Bataille, Chris & Melton, Noel, 2017. "Energy efficiency and economic growth: A retrospective CGE analysis for Canada from 2002 to 2012," Energy Economics, Elsevier, vol. 64(C), pages 118-130.
    18. Nermin Yaþar, 2017. "The Relationship between Energy Consumption and Economic Growth: Evidence from Different Income Country Groups," International Journal of Energy Economics and Policy, Econjournals, vol. 7(2), pages 86-97.
    19. Kümmel, Reiner & Lindenberger, Dietmar & Weiser, Florian, 2015. "The economic power of energy and the need to integrate it with energy policy," Energy Policy, Elsevier, vol. 86(C), pages 833-843.
    20. Kais Saidi & Sami Hammami, 2016. "Economic growth, energy consumption and carbone dioxide emissions: recent evidence from panel data analysis for 58 countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(1), pages 361-383, January.

    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:ecolec:v:70:y:2011:i:7:p:1354-1362. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    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/ecolecon .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.