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Do urbanization and industrialization affect energy intensity in developing countries?

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  • Sadorsky, Perry
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    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.

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    File URL: http://www.sciencedirect.com/science/article/pii/S014098831300011X
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    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 37 (2013)
    Issue (Month): C ()
    Pages: 52-59

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    Handle: RePEc:eee:eneeco:v:37:y:2013:i:c:p:52-59
    DOI: 10.1016/j.eneco.2013.01.009
    Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

    Keywords: Energy intensity; Developing countries; Industrialization; Urbanization;

    Find related papers by 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

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