Causal relationship between trade openness, economic growth and energy consumption: A panel data analysis of Asian countries

• Published in: Energy policy Vol. 69; pp. 82 - 91
• Main Authors: Nasreen, Samia, Anwar, Sofia
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01-06-2014; Elsevier; Elsevier Science Ltd
• Subjects: Applied sciences; Asia; Asians; Causality; Cointegration analysis; Economic data; Economic development; Economic growth; Economics; Energy; Energy consumption; Energy economics; Energy policy; Exact sciences and technology; General aspects; General, economic and professional studies; Methodology. Modelling; Panel data; Studies; Trade; Trade liberalization; Trade openness; Asia; Energy consumption; Economic growth; Trade openness
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2014.02.009

This paper explores the causal relationship between economic growth, trade openness and energy consumption using data of 15 Asian countries. The study covers the period of 1980–2011. We have applied panel cointegration and causality approaches to examine the long-run and causal relationship between variables.
Empirical results confirm the presence of cointegration between variables. The impact of economic growth and trade openness on energy consumption is found to be positive. The panel Granger causality analysis reveals the bidirectional causality between economic growth and energy consumption, trade openness and energy consumption.
•This study analyzes causality between energy, growth and trade in the Asian region.•Empirical results supported cointegrating relationship between variables.•Positive impact of growth and trade openness on energy usage is found in the long run.•Bidirectional Granger causality is observed between selected variables in the long run.