Decomposition of Energy Intensity Behavior: By Concentrating on Institutional and Economic Infrastructures

Document Type : Research Paper


1 NRI research center

2 islamic azad university, ayatollah amoli branch


This paper is analyzing the main factor that drives behavior of energy intensity in some countries during 2000-2015 by using decomposition approach and concentrating on Institutional and Economic Infrastructures. A  sample of countries including UK, Germany, Japan, Turkey, Saudi Arabia, Iran, China and Russia is selected and classified in three classes; the first class countries have high level of economic openness and institutional quality. The second class has the middle levels of economic openness and institutional quality. The third class have a low level of economic openness and institutional quality.
The findings show that countries with high levels of economic openness and institutional quality mainly have a low level of energy intensity. Also, the results of energy intensity decomposition by Fischer Ideal Index indicate that in the first class countries (UK, Germany and Japan) the main factor driving the changes in energy intensity, is efficiency improvement. By contrast, the second class (Turkey, Saudi Arabia) and the third class (Iran, China and Russia) have a different behavior of energy intensity: In Turkey, improvement of energy efficiency is dominant factor for driving energy intensity, but in Saudi Arabia, the structural changes by type of energy-intensive activities deactivate the efficiency effect. Moreover, in Iran and Russia, the main driver of energy intensity is the existence of inefficiency. while in China that is experienced a declining trend in energy intensity, the improving of efficiency is dominant effect.
JEL Classification: Q49، Q43


Main Subjects

پورعبادالهان کویچ، محسن، پناهی، حسین، شهبازی هومونلو، شهریار و صالحی ابر، خدیجه (1394). تجزیه عوامل مؤثر بر تغییرات مصرف انرژی در زیربخش‌های صنعتی ایران: مقایسه روش‌های لاسپیرز و دیویژیا. فصلنامه نظریه‌های کاربردی اقتصاد، شماره‌ی 4، 70-49.
شهبازی، کیومرث، صمد حکمتی، فرید و رضایی، هادی (1394). بررسی تأثیر اندازه‌ی دولت و حکمرانی خوب بر شدت مصرف انرژی: مطالعه‌ی موردی کشورهای عضو اوپک. فصلنامه نظریه­های کاربردی اقتصاد، سال دوم، شماره‌ی 4، 48-23.
گلی، زینت و اشرفی، یکتا (1389). بررسی شدت انرژی کشور و تجزیه آن با استفاده از شاخص ایده­آل فیشر در ایران. فصلنامه‌ی پژوهش‌ها و سیاست‌های اقتصادی، شماره‌ی 54، 54-35.
Afonso, A., & Jalles, T. (2011). Economic Performance and Government Size, ΕΧΒ Working Paper Series, No1399.
Aschauer, D. A. (1989a). Does Public Capital Crowd Out Private Capital?, Journal of Monetary Economics, 24: 171-188.
Aschauer, D. A. (1989b). It is Public Expenditure Productive , Journal of Monetary Economics, 23:177-200.
Aschauer, D. A. (1989c). Public Investment and Productivity Growth in the Group of Seven, Economic Perspectives, 13: 17-25.
Baldacci, E., Hillman, A.L., & Kojo, N.C. (2004). Growth Governance and Fiscal Policy Transmission in Low-Income Countries, European Journal of Political Economy, 20(3): 517-549.
Cole, M. A. (2006). Does Trade Liberalization Increase National Energy Use?, Economics Letters, 92(1): 108-112.
Fisher-Vanden, K., Jefferson, G. H., Liu, H., & Tao, Q. (2004). What is Driving China’s Decline in Energy Intensity?, Resource and Energy Economics, 26(1): 77-97.
Gitahi, N., Charles, O. S., & Nelson, W. (2014). Impact of Government Expenditure on Private Investment in Kenya. Research Journal of Economics, 2(8): 1-19.
Grossman, G., & Krueger, A. (1995). Economic Growth and the Environment , Quarterly Journal of Economics, 110: 353-377.
Hubler, M. (2009). Energy Saving Technology Diffusion via FDI and Trade: A CGE Model of China, Working Papers No.1479, Kiel Institute for the World Economy.
International Energy Agency (IEA), (2009). World Energy Outlook 2009.
International Energy Agency (IEA), (2015). Energy and Climate Change, World Energy Outlook Special Report.
Jollands, N., Heffner, G., Pasquier, S. B., Saussay, A. (2011). Energy Efficiency Governance, IEA study Report.
Jollands, N., & Ellis, M. (2009). Energy Efficiency Governance: An Emerging Priority, European Council for an Energy-Efficient Economy(ECEEE).
Kaldor, N. (1978). Further Essays on Economic Theory, London, Duckworth.
Lewis, W. A. (1980). the Slowing Down of the Engine of Growth. American Economic Review, 70(4): 64-555.
Kinoshita, Y. (2001). R&d and Technology Spillovers via FDI: Innovation and Absorptive Capacity, Working Papers at the University of Mishigan.
Li, K., & Boqiang, L. (2015). Impacts of Urbanization and Industrialization on Energy Consumption/CO2 Emissions: Does the Level of Development Matter?, Renewable and Sustainable Energy Reviews, 52: 1107-1122.
Lu, M-J, Lin L., C. Y., & Chen, S. (2015). The Effects of-Energy-Policies-on-Energy-Consumption-in-China, Working Paper, University of California.
Medlock, K., & Soligo, R. (2001). Economic Development and End-Use Energy Demand, The Energy Journal, 22(2):77–105. 7.
Price, L., Wang, X., & Yun, J. (2010). The challenge of reducing energy consumption of the Top-1000 largest industrial enterprises in China, Energy Policy, 38(11):6485-6498.
Sbia, R., Shahbaz, M., & Hamid, H. (2014). A Contribution of Foreign Direct Investment, Clean Energy, Trade Openness, Carbon Emissions and Economic Growth to Energy Demand in UAE, Economic Modelling, 36: 191-197.
Shahbaz, M., Nasreen, S., & Afza, T. (2014). Environmental Consequences of Economic Growth and Foreign Direct Investment: Evidence from Panel Data Analysis. Bull Energy Econ. 2:14–27.
Shahbaz, M., Nasreen, S., Ling, C. H., & Sbia, R. (2014). Causality between Trade Openness and Energy Consumption: What Causes what in High, Middle and Low Income Countries. Energy Policy, 70: 126-143.
Stefanov, R., Valentina, N., & Dyulgerov, A. (2011). Energy and Good Governance in Bulgaria Trends and Policy Option, Center for the Study of Democracy, ISBN 978-954-477-167-6.
Wang, J., & Blostrom, M. (1992). Foreign Investment and Technology Transfer: A Simple Model, European Economic Review, 36: 137-155.
Wing, S. I. (2008). Explaining the Declining Energy Intensity of the U.S. Economy. Resource and Energy Economics, 30: 21–40.
Wood, A. (1999). Demystifying Good Governance: An Overview of World Bank Governance Reforms and Conditions Trocaire, 1-42.
Zhang, F., & Huang, K. (2017). The Role of Government in Industrial Energy Conservation in China: Lessons from the Iron and Steel industry, Energy for Sustainable Development, 39: 101-114.
  • Receive Date: 19 August 2017
  • Revise Date: 16 April 2018
  • Accept Date: 06 November 2018
  • First Publish Date: 21 March 2019