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Decomposing energy demand across BRIIC countries

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  • Adetutu, Morakinyo O.
  • Glass, Anthony J.
  • Weyman-Jones, Thomas G.

Abstract

Energy plays an important role within the production technology of fast emerging economies, such that firms' reaction to changes in energy prices provides useful information on factor productivity and factor intensity, as well as the likely outcome of energy policy initiatives, among other things. Drawing on duality theory, this paper decomposes changes in energy demand into substitution and output effects using annual sector-level production data for Brazil, Russia, India, Indonesia and China (BRIIC) for the period 1995–2009. Unlike previous studies, this study analyzed the economic properties of the underlying production technology. Results indicate that changes in energy demand are strongly dominated by substitution effects. More importantly, an intriguing finding that emerges from our analysis is the role of economies of scale and factor accumulation, as opposed to technical progress, in giving rise to the growth performance of sampled economies.

Suggested Citation

  • Adetutu, Morakinyo O. & Glass, Anthony J. & Weyman-Jones, Thomas G., 2016. "Decomposing energy demand across BRIIC countries," Energy Economics, Elsevier, vol. 54(C), pages 396-404.
  • Handle: RePEc:eee:eneeco:v:54:y:2016:i:c:p:396-404
    DOI: 10.1016/j.eneco.2016.01.001
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    3. Ajayi, Victor & Weyman-Jones, Thomas & Glass, Anthony, 2017. "Cost efficiency and electricity market structure: A case study of OECD countries," Energy Economics, Elsevier, vol. 65(C), pages 283-291.
    4. Sharimakin, Akinsehinwa & Glass, Anthony J. & Saal, David S. & Glass, Karligash, 2018. "Dynamic multilevel modelling of industrial energy demand in Europe," Energy Economics, Elsevier, vol. 74(C), pages 120-130.

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    More about this item

    Keywords

    BRIIC countries; Input demand; Duality; Production technology; Translog cost function; Slutsky decomposition;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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