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Causality between Trade Openness and Energy Consumption: What Causes What in High, Middle and Low Income countries


  • Shahbaz, Muhammad
  • Nasreen, Samia
  • Ling, Chong Hui
  • Sbia, Rashid


This paper explores the relationship between trade openness and energy consumption using data of 91 high, middle and low income countries. The study covers the period of 1980-2010. We have applied panel cointegration and causality approaches for long run and causal relationship between the variables. Our results confirm the presence of cointegration between the variables. The relationship between trade openness and energy consumption is inverted U-shaped in high income countries but U-shaped in middle and low income countries. The homogenous and non-homogenous causality analysis reveals the bidirectional causality between trade openness and energy consumption.

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  • Shahbaz, Muhammad & Nasreen, Samia & Ling, Chong Hui & Sbia, Rashid, 2013. "Causality between Trade Openness and Energy Consumption: What Causes What in High, Middle and Low Income countries," MPRA Paper 50382, University Library of Munich, Germany, revised 04 Oct 2013.
  • Handle: RePEc:pra:mprapa:50382

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    Cited by:

    1. Sun, Sizhong & Anwar, Sajid, 2015. "Electricity consumption, industrial production, and entrepreneurship in Singapore," Energy Policy, Elsevier, vol. 77(C), pages 70-78.
    2. Shahbaz, Muhammad & Mallick, Hrushikesh & Mahalik, Mantu Kumar & Sadorsky, Perry, 2016. "The role of globalization on the recent evolution of energy demand in India: Implications for sustainable development," Energy Economics, Elsevier, vol. 55(C), pages 52-68.
    3. Shahbaz, Muhammad & Rasool, Ghulam & Ahmed, Khalid & Mahalik, Mantu Kumar, 2016. "Considering the effect of biomass energy consumption on economic growth: Fresh evidence from BRICS region," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 1442-1450.
    4. repec:eco:journ2:2017-03-16 is not listed on IDEAS
    5. Kyophilavong, Phouphet & Shahbaz, Muhammad & Anwar, Sabeen & Masood, Sameen, 2015. "The energy-growth nexus in Thailand: Does trade openness boost up energy consumption?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 46(C), pages 265-274.
    6. repec:ipg:wpaper:2014-592 is not listed on IDEAS
    7. Ahmed, Khalid & Bhattacharya, Mita & Qazi, Ahmer Qasim & Long, Wei, 2016. "Energy consumption in China and underlying factors in a changing landscape: Empirical evidence since the reform period," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 224-234.
    8. Buhari Dogan & Osman Deger, 2016. "How Globalization and Economic Growth Affect Energy Consumption: Panel Data Analysis in the Sample of Brazil, Russia, India, China Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 6(4), pages 806-813.
    9. repec:eco:journ2:2017-04-29 is not listed on IDEAS
    10. Shahbaz, Muhammad & Shahzad, Syed Jawad Hussain & Mahalik, Mantu Kumar & Sadorsky, Perry, 2017. "How Strong is the Causal Relationship between Globalization and Energy Consumption in Developed Economies? A Country-Specific Time-Series and Panel Analysis," MPRA Paper 80718, University Library of Munich, Germany, revised 08 Aug 2017.
    11. Yang, Zhenbing & Shao, Shuai & Yang, Lili & Liu, Jianghua, 2017. "Differentiated effects of diversified technological sources on energy-saving technological progress: Empirical evidence from China's industrial sectors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 1379-1388.
    12. repec:ebl:ecbull:eb-16-00740 is not listed on IDEAS
    13. Eyup Dogan, 2016. "The Relationship between Economic Growth, Energy Consumption and Trade," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 4(1), pages 70-80, March.
    14. Raza, Syed Ali & Shahbaz, Muhammad & Nguyen, Duc Khuong, 2015. "Energy conservation policies, growth and trade performance: Evidence of feedback hypothesis in Pakistan," Energy Policy, Elsevier, vol. 80(C), pages 1-10.
    15. Sohag, Kazi & Begum, Rawshan Ara & Abdullah, Sharifah Mastura Syed & Jaafar, Mokhtar, 2015. "Dynamics of energy use, technological innovation, economic growth and trade openness in Malaysia," Energy, Elsevier, vol. 90(P2), pages 1497-1507.

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    Trade; Energy; Causality;

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    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

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