The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation

This study contributes to the literature on energy demand by developing a theoretical framework, in which energy demand is a function of total factor productivity (TFP) alongside traditional factors such as price and income. The proposed theoretical framework is examined using annual data on energy...

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Autores principales:	Fakhri J. Hasanov, Jeyhun I. Mikayilov
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Energy consumption Total factor productivity Theoretical framework Panel data analysis Time series analysis Energy industries. Energy policy. Fuel trade HD9502-9502.5
Acceso en línea:	https://doaj.org/article/0feb1a79390d46fb82983296454d5efe
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spelling	oai:doaj.org-article:0feb1a79390d46fb82983296454d5efe2021-12-02T05:01:28ZThe impact of total factor productivity on energy consumption: Theoretical framework and empirical validation2211-467X10.1016/j.esr.2021.100777https://doaj.org/article/0feb1a79390d46fb82983296454d5efe2021-11-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S2211467X21001607https://doaj.org/toc/2211-467XThis study contributes to the literature on energy demand by developing a theoretical framework, in which energy demand is a function of total factor productivity (TFP) alongside traditional factors such as price and income. The proposed theoretical framework is examined using annual data on energy consumption, TFP, income, and energy price for 49 countries from 1990 to 2019. The empirical analysis includes 32 high-income countries, 12 upper-middle-income countries, and 5 lower-middle-income countries dictated by data availability. The results of the panel cointegration test and long-run estimates validate the proposed framework, i.e., TFP has a statistically significant negative effect on energy consumption, in addition to the theoretically predicted and statistically significant effects of income and price. The results of the individual country level analysis, as a complementary analysis to the panel, also show that TFP plays a role in shaping energy consumption. The suggested framework would be useful for policymaking to understand the role of TFP in energy demand. The key message of the study to the decisionmakers is that they should consider TFP in designing energy demand related policies. Because TFP can curb energy consumption without compromising economic growth, while helping to save energy resources and reduce environmental pollution, as it is a representative for technological progress and efficiency, and is driven by factors such as institutions, governance, infrastructure, human capital, learning by doing, macroeconomic stability - key elements of sustainable development. The proposed framework can also be used as a theoretical basis to link energy demand to the compositions and drivers of TFP, which opens up possibilities for future research.Fakhri J. HasanovJeyhun I. MikayilovElsevierarticleEnergy consumptionTotal factor productivityTheoretical frameworkPanel data analysisTime series analysisEnergy industries. Energy policy. Fuel tradeHD9502-9502.5ENEnergy Strategy Reviews, Vol 38, Iss , Pp 100777- (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Energy consumption Total factor productivity Theoretical framework Panel data analysis Time series analysis Energy industries. Energy policy. Fuel trade HD9502-9502.5
spellingShingle	Energy consumption Total factor productivity Theoretical framework Panel data analysis Time series analysis Energy industries. Energy policy. Fuel trade HD9502-9502.5 Fakhri J. Hasanov Jeyhun I. Mikayilov The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation
description	This study contributes to the literature on energy demand by developing a theoretical framework, in which energy demand is a function of total factor productivity (TFP) alongside traditional factors such as price and income. The proposed theoretical framework is examined using annual data on energy consumption, TFP, income, and energy price for 49 countries from 1990 to 2019. The empirical analysis includes 32 high-income countries, 12 upper-middle-income countries, and 5 lower-middle-income countries dictated by data availability. The results of the panel cointegration test and long-run estimates validate the proposed framework, i.e., TFP has a statistically significant negative effect on energy consumption, in addition to the theoretically predicted and statistically significant effects of income and price. The results of the individual country level analysis, as a complementary analysis to the panel, also show that TFP plays a role in shaping energy consumption. The suggested framework would be useful for policymaking to understand the role of TFP in energy demand. The key message of the study to the decisionmakers is that they should consider TFP in designing energy demand related policies. Because TFP can curb energy consumption without compromising economic growth, while helping to save energy resources and reduce environmental pollution, as it is a representative for technological progress and efficiency, and is driven by factors such as institutions, governance, infrastructure, human capital, learning by doing, macroeconomic stability - key elements of sustainable development. The proposed framework can also be used as a theoretical basis to link energy demand to the compositions and drivers of TFP, which opens up possibilities for future research.
format	article
author	Fakhri J. Hasanov Jeyhun I. Mikayilov
author_facet	Fakhri J. Hasanov Jeyhun I. Mikayilov
author_sort	Fakhri J. Hasanov
title	The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation
title_short	The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation
title_full	The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation
title_fullStr	The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation
title_full_unstemmed	The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation
title_sort	impact of total factor productivity on energy consumption: theoretical framework and empirical validation
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/0feb1a79390d46fb82983296454d5efe
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The impact of total factor productivity on energy consumption: Theoretical framework and empirical validation

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