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Energy price-induced and exogenous technological change: Assessing the economic and environmental outcomes

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  • Kumar, Surender
  • Managi, Shunsuke

Abstract

In this paper, we distinguish between factor/output substitution and shifts in the production technology frontier. Our model includes the by-products of carbon dioxide and sulfur dioxide emissions where the function requires the simultaneous expansion of good outputs and reductions in emissions. We estimate a directional output distance function for 80 countries over the period 1971-2000 to measure the exogenous and oil price-induced technological change. On average, we find substantial oil price-induced technological progress at the world level when long-term oil prices are rising, although the growth rate is more volatile in developed countries than in developing countries. The results also show that developed countries experience higher exogenous technological progress in comparison with developing countries, and the gap between the two has increased during the period of our study.

Suggested Citation

  • Kumar, Surender & Managi, Shunsuke, 2009. "Energy price-induced and exogenous technological change: Assessing the economic and environmental outcomes," Resource and Energy Economics, Elsevier, vol. 31(4), pages 334-353, November.
  • Handle: RePEc:eee:resene:v:31:y:2009:i:4:p:334-353
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    Cited by:

    1. Kumar, Surender & Managi, Shunsuke, 2010. "Sulfur dioxide allowances: Trading and technological progress," Ecological Economics, Elsevier, vol. 69(3), pages 623-631, January.
    2. Managi, Shunsuke & Hibiki, Akira & Shimane, Tetsuya, 2014. "Efficiency or technology adoption: A case study in waste-treatment technology," Resource and Energy Economics, Elsevier, vol. 36(2), pages 586-600.
    3. Silva, F.D.F. & Fulginiti, L. & Perrin, R., 2018. "Agricultural productivity and forest preservation in the Brazilian Amazon," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277167, International Association of Agricultural Economists.
    4. Andreas, Eder & Bernhard, Mahlberg & Bernhard, Stürmer, 2017. "Measuring and explaining productivity growth of renewable energy producers: An empirical study of Austrian biogas plants," MPRA Paper 79826, University Library of Munich, Germany.
    5. Managi, Shunsuke & Okimoto, Tatsuyoshi, 2013. "Does the price of oil interact with clean energy prices in the stock market?," Japan and the World Economy, Elsevier, vol. 27(C), pages 1-9.
    6. Kemp-Benedict, Eric, 2017. "Biased technological change and Kaldor’s stylized facts," MPRA Paper 76803, University Library of Munich, Germany.
    7. Yang, Fuxia & Yang, Mian, 2015. "Analysis on China's eco-innovations: Regulation context, intertemporal change and regional differences," European Journal of Operational Research, Elsevier, vol. 247(3), pages 1003-1012.
    8. Du, Limin & Hanley, Aoife & Zhang, Ning, 2016. "Environmental technical efficiency, technology gap and shadow price of coal-fuelled power plants in China: A parametric meta-frontier analysis," Resource and Energy Economics, Elsevier, vol. 43(C), pages 14-32.
    9. Zhang, Ning & Wang, Bing, 2015. "A deterministic parametric metafrontier Luenberger indicator for measuring environmentally-sensitive productivity growth: A Korean fossil-fuel power case," Energy Economics, Elsevier, vol. 51(C), pages 88-98.
    10. Kumar, Surender & Managi, Shunsuke, 2016. "Carbon-sensitive productivity, climate and institutions," Environment and Development Economics, Cambridge University Press, vol. 21(01), pages 109-133, February.
    11. Ruiz-Fuensanta, María J., 2016. "The region matters: A comparative analysis of regional energy efficiency in Spain," Energy, Elsevier, vol. 101(C), pages 325-331.
    12. repec:eee:ecolec:v:150:y:2018:i:c:p:204-216 is not listed on IDEAS
    13. Kumar, Surender & Managi, Shunsuke & Matsuda, Akimi, 2012. "Stock prices of clean energy firms, oil and carbon markets: A vector autoregressive analysis," Energy Economics, Elsevier, vol. 34(1), pages 215-226.
    14. Carlos Pestana Barros & Shunsuke Managi & Yuichiro Yoshida, 2010. "Technical Efficiency, Regulation And Heterogeneity In Japanese Airports," Pacific Economic Review, Wiley Blackwell, vol. 15(5), pages 685-696, December.
    15. Kumar, Surender, 2013. "Comprehensive wealth and sustainable development in India," MPRA Paper 43809, University Library of Munich, Germany.
    16. Yu-Ying Lin, Eugene & Chen, Ping-Yu & Chen, Chi-Chung, 2013. "Measuring green productivity of country: A generlized metafrontier Malmquist productivity index approach," Energy, Elsevier, vol. 55(C), pages 340-353.
    17. Kemp-Benedict, Eric, 2018. "Dematerialization, Decoupling, and Productivity Change," Ecological Economics, Elsevier, vol. 150(C), pages 204-216.
    18. Kemp-Benedict, Eric, 2014. "Shifting to a Green Economy: Lock-in, Path Dependence, and Policy Options," MPRA Paper 60175, University Library of Munich, Germany.
    19. Lindmark, Magnus & Bergquist, Ann-Kristin & Andersson, Lars Fredrik, 2011. "Energy transition, carbon dioxide reduction and output growth in the Swedish pulp and paper industry: 1973-2006," Energy Policy, Elsevier, vol. 39(9), pages 5449-5456, September.
    20. Jiang, Zhujun & Lin, Boqiang, 2012. "China's energy demand and its characteristics in the industrialization and urbanization process," Energy Policy, Elsevier, vol. 49(C), pages 608-615.
    21. Oh, Dong-hyun & Heshmati, Almas, 2010. "A sequential Malmquist-Luenberger productivity index: Environmentally sensitive productivity growth considering the progressive nature of technology," Energy Economics, Elsevier, vol. 32(6), pages 1345-1355, November.

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