How do industrialization and trade openness influence energy intensity? Evidence from a path model in case of Bangladesh

• Published in: Energy policy Vol. 133; p. 110916
• Main Authors: Pan, Xiongfeng, Uddin, Md. Kamal, Saima, Umme, Jiao, Zhiming, Han, Cuicui
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01-10-2019; Elsevier Science Ltd
• Subjects: Bangladesh; Economic development; Economic growth; Economic models; Empirical analysis; Energy; Energy intensity; Energy management; Energy policy; Impact analysis; Industrial development; Industrialization; Innovations; Interdependence; Macroeconomics; Openness; Path model; Technological change; Trade; Trade openness; Bangladesh; Industrialization; Bangladesh; Economic growth; Trade openness; Energy intensity; Path model
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2019.110916

Nowadays, multifaceted interdependence between macroeconomic variables results in an extended list of factors that have diverse impacts on energy intensity. Thus, sustaining energy intensity at a desired level demands advanced studies to investigate the multifarious influences of its factors and ensure proactive measures to deal with them. This paper aims to set up a path model to analyze the direct and indirect impacts of industrialization and trade openness on energy intensity in Bangladesh. The results corroborate that industrialization has a direct positive influence on energy intensity where trade openness shows a direct negative effect on it; and both industrialization and trade openness have negative indirect impact on energy intensity through technological innovation and economic growth respectively. In case of individual total impacts, only industrialization affects energy intensity positively, where trade openness, technological innovation and economic growth negatively do. Based on the empirical results, some policy implications regarding energy intensity and effects of its factors on it are also presented.
•Effects of trade openness and industrialization on energy intensity are studied.•A simple path model is used as a research tool in case of Bangladesh.•Industrialization has direct positive effect on energy intensity.•Trade openness has direct negative impact on energy intensity.•Industrialization and openness have indirect negative impacts on energy intensity.