IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v37y2013icp52-59.html
   My bibliography  Save this article

Do urbanization and industrialization affect energy intensity in developing countries?

Author

Listed:
  • Sadorsky, Perry

Abstract

Against a backdrop of concerns about climate change, peak oil, and energy security issues, reducing energy intensity is often advocated as a way to at least partially mitigate these impacts. This study uses recently developed heterogeneous panel regression techniques like mean group estimators and common correlated effects estimators to model the impact that income, urbanization and industrialization has on energy intensity for a panel of 76 developing countries. In the long-run, a 1% increase in income reduces energy intensity by −0.45% to −0.35%. Long-run industrialization elasticities are in the range 0.07 to 0.12. The impact of urbanization on energy intensity is mixed. In specifications where the estimated coefficient on urbanization is statistically significant, it is slightly larger than unity. The implications of these results for energy policy are discussed.

Suggested Citation

  • Sadorsky, Perry, 2013. "Do urbanization and industrialization affect energy intensity in developing countries?," Energy Economics, Elsevier, vol. 37(C), pages 52-59.
    • Handle: RePEc:eee:eneeco:v:37:y:2013:i:c:p:52-59
    DOI: 10.1016/j.eneco.2013.01.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S014098831300011X
    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. Markus Eberhardt & Francis Teal, 2008. "Modeling Technology and Technological Change in Manufacturing: How do Countries Differ?," CSAE Working Paper Series 2008-12, Centre for the Study of African Economies, University of Oxford.
    2. M. Hashem Pesaran, 2006. "Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure," Econometrica, Econometric Society, vol. 74(4), pages 967-1012, July.
    3. Stern, David I., 2012. "Modeling international trends in energy efficiency," Energy Economics, Elsevier, vol. 34(6), pages 2200-2208.
    4. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    5. Kapetanios, G. & Pesaran, M. Hashem & Yamagata, T., 2011. "Panels with non-stationary multifactor error structures," Journal of Econometrics, Elsevier, vol. 160(2), pages 326-348, February.
    6. Pesaran, M Hashem, 1997. "The Role of Economic Theory in Modelling the Long Run," Economic Journal, Royal Economic Society, vol. 107(440), pages 178-191, January.
    7. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo Group Munich.
    8. Coakley, Jerry & Fuertes, Ana-Maria & Smith, Ron, 2006. "Unobserved heterogeneity in panel time series models," Computational Statistics & Data Analysis, Elsevier, vol. 50(9), pages 2361-2380, May.
    9. Mishra, Vinod & Smyth, Russell & Sharma, Susan, 2009. "The energy-GDP nexus: Evidence from a panel of Pacific Island countries," Resource and Energy Economics, Elsevier, vol. 31(3), pages 210-220, August.
    10. 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.
    11. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    12. Samouilidis, J. -E. & Mitropoulos, C. S., 1984. "Energy and economic growth in industrializing countries : The case of Greece," Energy Economics, Elsevier, vol. 6(3), pages 191-201, July.
    13. Pesaran, M.H., 2004. "‘General Diagnostic Tests for Cross Section Dependence in Panels’," Cambridge Working Papers in Economics 0435, Faculty of Economics, University of Cambridge.
    14. O'Neill, Brian C. & Ren, Xiaolin & Jiang, Leiwen & Dalton, Michael, 2012. "The effect of urbanization on energy use in India and China in the iPETS model," Energy Economics, Elsevier, vol. 34(S3), pages 339-345.
    15. Jones, Donald W., 1991. "How urbanization affects energy-use in developing countries," Energy Policy, Elsevier, vol. 19(7), pages 621-630, September.
    16. Donald W. Jones, 1989. "Urbanization and Energy Use In Economic Development," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 29-44.
    17. Eberhardt, Markus & Bond, Stephen, 2009. "Cross-section dependence in nonstationary panel models: a novel estimator," MPRA Paper 17692, University Library of Munich, Germany.
    18. Rossana Galli, 1998. "The Relationship Between Energy Intensity and Income Levels: Forecasting Long Term Energy Demand in Asian Emerging Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 85-105.
    19. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    20. Krey, Volker & O'Neill, Brian C. & van Ruijven, Bas & Chaturvedi, Vaibhav & Daioglou, Vassilis & Eom, Jiyong & Jiang, Leiwen & Nagai, Yu & Pachauri, Shonali & Ren, Xiaolin, 2012. "Urban and rural energy use and carbon dioxide emissions in Asia," Energy Economics, Elsevier, vol. 34(S3), pages 272-283.
    21. Blanchard, Odile, 1992. "Energy consumption and modes of industrialization : Four developing countries," Energy Policy, Elsevier, vol. 20(12), pages 1174-1185, December.
    22. Cole, Matthew A., 2006. "Does trade liberalization increase national energy use?," Economics Letters, Elsevier, vol. 92(1), pages 108-112, July.
    23. Brantley Liddle, 2003. "Demographic dynamics and per capita environmental impact: using panel regressions and household decompositions to examine population and transport," MPIDR Working Papers WP-2003-029, Max Planck Institute for Demographic Research, Rostock, Germany.
    24. Poumanyvong, Phetkeo & Kaneko, Shinji, 2010. "Does urbanization lead to less energy use and lower CO2 emissions? A cross-country analysis," Ecological Economics, Elsevier, vol. 70(2), pages 434-444, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Energy intensity; Developing countries; Industrialization; Urbanization;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

    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:eneeco:v:37:y:2013:i:c:p:52-59. 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: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/eneco .

    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 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.

    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.