The Relationship between Economic Complexity, Energy Consumption Structure and Greenhouse Gas Emission: Heterogeneous Panel Evidence from the EU Countries

By Olimpia Neagu, M. Teodoru. Sustainability, 2019

329 citations recorded by the source corpus.

The aim of the paper is to examine the long-term relationship between economic complexity, energy consumption structure, and greenhouse gas emission, within a panel of European Union countries and two subpanels: (i) European economies with higher economic complexity and (ii) European economies with a lower level of economic complexity. Taking into consideration the heterogeneity among European countries, the heterogeneous panel technique is used, including panel estimation through fully modified least squares (FMOLS) and dynamic ordinary least squares (DOLS). The empirical findings indicate a long-term equilibrium relationship between economic complexity, energy consumption structure and greenhouse gas emission within all three panels. Economic complexity and energy consumption structure have a statistically significant impact on greenhouse gas emission within all panels, but the influence is higher within the subpanel of countries with a lower level of economic complexity, suggesting a higher risk of pollution as the economic complexity grows and as the energy balance inclines in favor of non-renewable energy consumption. Our paper suggests that the economic complexity is a variable that must be taken into consideration when national economic and energy policies are shaped. Finally, policy implications for each panel of countries are discussed.

Subfields: Economics and Econometrics, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/f296b7c80a1d404b25920207f8e1695e4d566c7a

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In Economics and Econometrics

1. Umer Shahzad
2. Olimpia Neagu
3. Buhari Doğan
4. Z. Fareed
5. Lianbiao Cui
6. L. Chu
7. Avik Sinha
8. Antonios Garas

In Management Science and Operations Research

1. Umer Shahzad
2. Buhari Doğan
3. Z. Fareed
4. L. Chu
5. Avik Sinha
6. Olimpia Neagu

Citations in the corpus

• Economic Complexity and Environmental Performance: Evidence from a World Sample (2019, background): “[36] for CO2 emissions in lower- and higher-middle-income countries and [101] for greenhouse gas emissions in EU.”
• Renewable and nonrenewable energy consumption, trade and CO2 emissions in high emitter countries: does the income level matter? (2020, result): “Such empirical findings are in line with the findings of Neagu and Teodoru (2019) for the case of EU countries.”
• Economic Complexity and Ecological Footprint: Evidence from the Most Complex Economies in the World (2020, methodology): “, [48]) by using new econometrical methods for panel data (i.”
• Economic structure and environmental Kuznets curve hypothesis: new evidence from economic complexity (2020, background): “Following Sheng et al. (2019) and Neagu and Teodoru (2019), we choose GDP per capita and the proportion of renewable energy consumption to represent affluence and technology, respectively.”
• Dynamic Impacts of Economic Growth and Forested Area on Carbon Dioxide Emissions in Malaysia (2020, background): “Moreover, some studies revealed the environmental Kuznets curve (EKC) presenting the simple trail of economic growth and environmental pollutions or emissions for various countries including EU [55,60,61], Organisation of Islamic Cooperation (OIC) countries [32], and BRIC [56]; Middle East and North”
• Does Export product diversification help to reduce energy demand: Exploring the contextual evidences from the newly industrialized countries (2021, methodology): “<<Insert table 2(a)>> <<Insert table 2(b)>> In order to explore the relationship between export product diversification and energy consumption, the panel data methodology is utilized due to its ability to control serial correlation and heterogeneity issues (Baltagi, 2005; Neagu and Teodoru, 2019).”
• The Link between Economic Complexity and Carbon Emissions in the European Union Countries: A Model Based on the Environmental Kuznets Curve (EKC) Approach (2019, positive): “Another recent study (Neagu and Teodoru, 2019) [18] investigates the effect of ECI on greenhouse gas emissions in 25 the European Union countries for 1995–2014.”