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Effects of changing trade structure and technical characteristics of the manufacturing sector on energy intensity in Ghana

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  • Adom, Philip K.
  • Kwakwa, Paul Adjei

Abstract

This study examined the effects of changing trade structure and changing technical characteristics of the manufacturing sector alongside the effects of foreign direct investment and urbanization on energy intensity in Ghana. In order to produce a result that is not biased towards non-rejection, the Zivot–Andrews unit root test with structural break was used. The study applied the Phillip–Hansen, Park, and Stock–Watson cointegration models, which are more robust to serial correlation and exogeneity problems. Preliminary findings showed evidence of cointegration. The study concludes that the changing technical characteristics of the manufacturing sector after the reform and changing production mix in favor of less energy intensive improved energy efficiency. However, energy consumption via exports which outweighed the energy saving via imports of capital goods after the reform in 1983 worsened energy efficiency. Growing urbanization significantly increases energy intensity. In all, technological diffusion via trade exerts significant influence on energy intensity than technological diffusion via foreign direct investment. These results are robust to the Cholesky variance decomposition analysis.

Suggested Citation

  • Adom, Philip K. & Kwakwa, Paul Adjei, 2014. "Effects of changing trade structure and technical characteristics of the manufacturing sector on energy intensity in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 475-483.
  • Handle: RePEc:eee:rensus:v:35:y:2014:i:c:p:475-483
    DOI: 10.1016/j.rser.2014.04.014
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    3. Adom, Philip Kofi & Amakye, Kwaku & Barnor, Charles & Quartey, George & Bekoe, William, 2016. "Shift in demand elasticities, road energy forecast and the persistence profile of shocks," Economic Modelling, Elsevier, vol. 55(C), pages 189-206.
    4. Tafadzwa Ruzive & Thando Mkhombo & Simbarashe Mhaka & Nomahlubi Mavikela & Andrew Phiri, 2019. "Electricity Intensity and Unemployment in South Africa: A Quantile Regression Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 31-40.
    5. repec:sae:globus:v:19:y:2018:i:4:p:873-888 is not listed on IDEAS
    6. Adom, Philip Kofi & Amuakwa-Mensah, Franklin, 2016. "What drives the energy saving role of FDI and industrialization in East Africa?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 925-942.
    7. Asuamah Yeboah, Samuel, 2018. "Do government activities determine electricity consumption in Ghana? An empirical investigation," MPRA Paper 89408, University Library of Munich, Germany.
    8. Adom, Philip Kofi, 2015. "Business cycle and economic-wide energy intensity: The implications for energy conservation policy in Algeria," Energy, Elsevier, vol. 88(C), pages 334-350.
    9. Adom, Philip Kofi, 2016. "The transition between energy efficient and energy inefficient states in Cameroon," Energy Economics, Elsevier, vol. 54(C), pages 248-262.
    10. Calcagnini, Giorgio & Giombini, Germana & Travaglini, Giuseppe, 2016. "Modelling energy intensity, pollution per capita and productivity in Italy: A structural VAR approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1482-1492.
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    15. Adom, Philip Kofi, 2015. "Asymmetric impacts of the determinants of energy intensity in Nigeria," Energy Economics, Elsevier, vol. 49(C), pages 570-580.
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    17. Eric Fosu Oteng-Abayie & Prosper Awuni Ayinbilla & Maame Esi Eshun, 2018. "Macroeconomic Determinants of Crude Oil Demand in Ghana," Global Business Review, International Management Institute, vol. 19(4), pages 873-888, August.
    18. Ackah, Ishmael & Appiah-Adu, Kwaku & Ahunu, Linda, 2015. "What Factors Drive Energy Consumption in Ghana?," MPRA Paper 66095, University Library of Munich, Germany.
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    21. Proskuryakova, L. & Kovalev, A., 2015. "Measuring energy efficiency: Is energy intensity a good evidence base?," Applied Energy, Elsevier, vol. 138(C), pages 450-459.

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