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Assessing links between energy consumption, freight transport, and economic growth: evidence from dynamic simultaneous equation models

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Abstract

We investigate this study to examine the relationship between economic growth, freight transport, and energy consumption for 63 developing countries over the period of 1990–2016. In order to make the panel data analysis more homogeneous, we apply the income level of countries to divide the global panel into three sub-panels, namely, lower-middle income countries (LMIC), upper-middle income countries (UMIC), and high-income countries (HIC). Using the generalized method of moments (GMM), the results prove evidence of bidirectional causal relationship between economic growth and freight transport for all selected panels and between economic growth and energy consumption for the high- and upper-middle income panels. For the lower-middle income panel, the causality is unidirectional running from energy consumption to economic growth. Also, the results indicate that the relationship between freight transport and energy use is bidirectional for the high-income countries and unidirectional from freight transport to energy consumption for the upper-middle and lower-middle income countries. Empirical evidence demonstrates the importance of energy for economic activity and rejects the neo-classical assumption that energy is neutral for growth. An important policy recommendation is that there is need of advancements in vehicle technology which can reduce energy intensity from transport sector and improve the energy efficiency in transport activity which in turn allows a greater positive role of transport in global economic activity.

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Notes

  1. England, France, Germany, Italy, and Spain

  2. Countries are classified on the basis of World Bank income classification.

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Authors and Affiliations

  1. Department of Economics, Faculty of Arts and Social Sciences, Government College Women University Faisalabad, Faisalabad, Pakistan

    Samia Nasreen

  2. Department of Economics, Faculty of economics and management, University of Sfax, street of airport, Km 4.5, LP 1008, Sfax, Tunisia

    Samir Saidi

  3. Faculty of Economics and Administrative Sciences, Cag University, 33800, Mersin, Turkey

    Ilhan Ozturk

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  1. Samia Nasreen
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  2. Samir Saidi
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  3. Ilhan Ozturk
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Correspondence to Samia Nasreen.

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Nasreen, S., Saidi, S. & Ozturk, I. Assessing links between energy consumption, freight transport, and economic growth: evidence from dynamic simultaneous equation models. Environ Sci Pollut Res 25, 16825–16841 (2018). https://doi.org/10.1007/s11356-018-1760-5

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