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Energy Efficiency and the Role of Financial Development, Trade Openness and Technological Innovation: Exploring the Dynamic Linkages for Pakistan
Samia Nasreen
Lahore College for Women University
Corresponding Author
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The study explores the dynamic linkages among financial development, trade openness, technological innovation and energy efficiency in Pakistan utilizing cointegration tests, Directed Acyclic Graphs (DAG) and Structural Vector Autoregression (SVAR) model for the period 1980-2017. The results of Johansen cointegration show that variables ae cointegrated. The robustness of cointegration relationship is confirmed by applying Gregory-Hansen structural break cointegration. The empirical findings imply that financial development and technological innovation positively and significantly stimulate energy efficiency while trade openness and economic growth negatively and significantly impact on energy efficiency in long-run. The DAG results explain the evidence of causality from financial development, trade openness, technological innovation and economic growth to energy efficiency. The results of forecast error variance decomposition from SVAR model describe that technological innovation has greater impact on energy efficiency in short-term but its impact gradually decreases with the extension of forecast period. On contrary, the promotion effect of financial development and trade openness on energy efficiency increase gradually over time and become highest in long-run. This finding underlines the relevance of technological innovation and trade openness to policy makers in order to achieve energy efficiency in Pakistan.
Keywords
Energy efficiency, Financial development, trade openness, technological innovation, Pakistan.
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This is a preprint. It has not completed peer review.
Research
Energy Efficiency and the Role of Financial Development, Trade Openness and Technological Innovation: Exploring the Dynamic Linkages for Pakistan
Samia Nasreen
Lahore College for Women University
Corresponding Author
Badges
Prescreen
This manuscript passed our Prescreen assessment
Complete author information
Appropriate declaration statements
Potential risks to human health
Prescreen
History
CURRENT STATUS: Posted
Version 1
Posted 29 Sep, 2020
No community comments so far
Metrics
Comments: 0
PDF Downloads: ...
HTML Views: ...
License:
This work is licensed under a CC BY 4.0 License. Read Full License
The study explores the dynamic linkages among financial development, trade openness, technological innovation and energy efficiency in Pakistan utilizing cointegration tests, Directed Acyclic Graphs (DAG) and Structural Vector Autoregression (SVAR) model for the period 1980-2017. The results of Johansen cointegration show that variables ae cointegrated. The robustness of cointegration relationship is confirmed by applying Gregory-Hansen structural break cointegration. The empirical findings imply that financial development and technological innovation positively and significantly stimulate energy efficiency while trade openness and economic growth negatively and significantly impact on energy efficiency in long-run. The DAG results explain the evidence of causality from financial development, trade openness, technological innovation and economic growth to energy efficiency. The results of forecast error variance decomposition from SVAR model describe that technological innovation has greater impact on energy efficiency in short-term but its impact gradually decreases with the extension of forecast period. On contrary, the promotion effect of financial development and trade openness on energy efficiency increase gradually over time and become highest in long-run. This finding underlines the relevance of technological innovation and trade openness to policy makers in order to achieve energy efficiency in Pakistan.
Figure 1
Figure 2
Figure 3
Figure 4
Figure 5
Figure 6
Figure 7
Figure 8
Due to technical limitations, full-text HTML conversion of this manuscript could not be completed. However, the manuscript can be downloaded and accessed as a PDF.