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The role of energy in economic growth: the case of Croatia

Author

Listed:
  • Nela Vlahinic-Dizdarevic

    () (University of Rijeka, Faculty of Economics, Rijeka, Croatia)

  • Sasa Zikovic

    (University of Rijeka, Faculty of Economics, Rijeka, Croatia)

Abstract

The purpose of this research is to examine the causal relationship between energy and economic growth in Croatia using data for the period from 1993 to 2006. We use a bivariate model of real GDP and five energy variables: energy consumption in industry and households, oil consumption, primary energy production and net energy imports. Since we found cointegration for all of the tested relationships, we use an Error Correction Model (ECM) which also allows us to distinguish between long and short term relationship among the variables. The empirical results provide clear support of causality that runs from real GDP growth to all energy variables. Our results differ from most of the studies analysing developing countries and are similar to those investigating developed, post-industrial economies with strong tertiary sector. Our research results reflect relatively low energy intensity in Croatia as a consequence of transition depression during the 1990s and the process of deindustrialization.

Suggested Citation

  • Nela Vlahinic-Dizdarevic & Sasa Zikovic, 2010. "The role of energy in economic growth: the case of Croatia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 28(1), pages 35-60.
  • Handle: RePEc:rfe:zbefri:v:28:y:2010:i:1:p:35-60
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    File URL: https://www.efri.uniri.hr/sites/efri.hr/files/cr-collections/2/06-vlahinic-zikovic-2010-1.pdf
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    References listed on IDEAS

    as
    1. Philippe Aghion & Diego Comin & Peter Howitt & Isabel Tecu, 2016. "When Does Domestic Savings Matter for Economic Growth?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(3), pages 381-407, August.
    2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    3. Smulders, Sjak & de Nooij, Michiel, 2003. "The impact of energy conservation on technology and economic growth," Resource and Energy Economics, Elsevier, vol. 25(1), pages 59-79, February.
    4. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
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    Citations

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    Cited by:

    1. Floriana Florestano, 2013. "Hydrocarbon exploitation and macroeconomic performance: a structural var approach for Basilicata1," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2013(1), pages 147-174.
    2. Nela Vlahinic & Pavle Jakovac, 2014. "Revisiting the Energy Consumption-Growth Nexus for Croatia: New Evidence from a Multivariate Framework Analysis," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 8(4), December.
    3. Mustafa SAATCÝ & Yasemin DUMRUL, 2013. "The Relationship Between Energy Consumption and Economic Growth: Evidence From A Structural Break Analysis For Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 3(1), pages 20-29.
    4. Stephan B. Bruns, Christian Gross and David I. Stern, 2014. "Is There Really Granger Causality Between Energy Use and Output?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    5. repec:pje:journl:article28sumiv is not listed on IDEAS
    6. Borozan, Djula, 2013. "Exploring the relationship between energy consumption and GDP: Evidence from Croatia," Energy Policy, Elsevier, vol. 59(C), pages 373-381.

    More about this item

    Keywords

    energy; economic growth; Error Correction Model (ECM); Croatia;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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