Overview of selected studies Mahadevan & Asafu-Adjaye 2006

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Annexes

Overview of selected studies Mahadevan & Asafu-Adjaye 2006

Study Estimation method Period Countries Results

Kraft and Kraft (1978) Bivariate Sims causality test 1947–

1974 USA Income→energy

Yu and Choi (1985) Bivariate Granger test 1954–

1976 South Korea Income→energy

Philippines Energy→income

Erol and Yu, 1987 Bivariate Granger test USA Energy income

Yu and Jin (1992) Bivariate Engle & Granger test

1974–

1989 USA Energy income

Stern (1993) Multivariate VAR 1947–

1990 USA Energy→income

Masih and Masih

(1996) Trivariate VECM 1955–

1990

Malaysia, Singapore, &

Philippines Energy income

India Energy→income

Indonesia Income→energy

Pakistan Energy↔income

Glasure and Lee

(1997) Bivariate VECM 1961–

1990 South Korea & Singapore Energy↔income

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Masih and Masih

1991 Sri Lanka & Thailand Energy→income

Asafu-Adjaye (2000) Trivariate VECM 1973–

1995 India & Indonesia, Energy→income

Thailand & Philippines Energy↔income

Hondroyiannis et al.

1996 Greece Energy↔income

Soytas and Sari (2003) Bivariate VECM 1950–

1992 Argentina Energy↔income

South Korea Income→energy

Turkey Energy→income

Indonesia & Poland Energy income

Canada, USA, & UK Energy income

Fatai et al. (2004) Bivariate Toda and Yamamoto (1995)

1960–

1999 Indonesia & India Energy→income

Thailand & Philippines Energy↔income

Oh and Lee (2004) Trivariate VECM 1970–

1999 South Korea Energy↔income

Wolde-Rufael (2004) Bivariate Toda and Yamamoto (1995)

1952–

1999 Shanghai Energy→income

Lee (2005) Trivariate Panel VECM 1975–

2001 18 developing countries Energy→income

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Al-Iriani (2006) Bivariate Panel VECM 1971–

2002

Gulf Cooperation

Countries Income→energy

Notes: → means variable x Granger causes variable y; ↔ means bidirectional causality; means

no causality in any direction. VAR means vector autoregression and VECM means vector error- correction model.

Energy intensity of main products

Product China

1990

China 2004

China advanced leave (company, year)

World advanced leave (year)

Steel (kgoe/t) (comparable)

697.9 491.4 472.5 (BaoSteel

2004)

452.2 (2000)

Cement(kgoe/t) 140.7 109.9 88.0

(2000)

Ethylene(kgoe/t) 1106.0 702.8 688.3 (SINOPEC

2004)

440.3 (2003) Synthetic

ammonia (kgoe/t)

940.1 828.8 788.9 --

Aluminum (kWh/t)

16,223 15,080

(2003)

-- 14,100

(2003) Oil refinery

(kgoe/t)

105.7 72.7

(2003)

50.69 (Yangzi, 2004)

50.9 (2003) Source: NDRC (2005a), SINOPEC (2005), Wang (2005) and EF (2004)

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Panel Unit Root Test results for the aggregate Y and E at first difference

Y –general 1stD

Panel unit root test: Summary Date: 06/23/08 Time: 15:20 Sample: 1970 2006

Exogenous variables: Individual effects, individual linear trends User specified lags at: 1

Newey-West bandwidth selection using Bartlett kernel

Cross-

Method Statistic Prob.** sections Obs

Null: Unit root (assumes common unit root process)

Levin, Lin & Chu t* -4.15796 0.0000 3 98

Breitung t-stat -2.56235 0.0052 3 95

Null: Unit root (assumes individual unit root process)

Im, Pesaran and Shin W-stat -2.50482 0.0061 3 98 ADF - Fisher Chi-square 16.6604 0.0106 3 98 PP - Fisher Chi-square 23.4909 0.0006 3 101

Null: No unit root (assumes common unit root process)

Hadri Z-stat 3.20766 0.0007 3 104

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** Probabilities for Fisher tests are computed using an asympotic Chi -square distribution. All other tests assume asymptotic normality.

E-general 1stD

Panel unit root test: Summary Date: 06/23/08 Time: 15:23 Sample: 1970 2006

Exogenous variables: Individual effects, individual linear trends User specified lags at: 1

Newey-West bandwidth selection using Bartlett kernel

Cross-

Method Statistic Prob.** sections Obs

Null: Unit root (assumes common unit root process)

Levin, Lin & Chu t* -2.64914 0.0040 3 81

Breitung t-stat -0.88985 0.1868 3 78

Null: Unit root (assumes individual unit root process)

Im, Pesaran and Shin W-stat -2.59397 0.0047 3 81 ADF - Fisher Chi-square 19.8498 0.0029 3 81 PP - Fisher Chi-square 19.2505 0.0038 3 85

Null: No unit root (assumes common unit root process)

Hadri Z-stat 2.45515 0.0070 3 89

** Probabilities for Fisher tests are computed using an asympotic Chi

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-square distribution. All other tests assume asymptotic normality.

Causality: Wald F statistics and joint Wald F statistics test results

Aggregate from Y to E causality Long term (ECT)

Wald Test:

Equation: Untitled

Test Statistic Value df Probability

F-statistic 372.5588 (1, 82) 0.0000

Chi-square 372.5588 1 0.0000

Null Hypothesis Summary:

Normalized Restriction (= 0) Value Std. Err.

C(1) 0.541544 0.028057

Restrictions are linear in coefficients.

Short term (ΔE) Wald Test:

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7 Equation: Untitled

F-statistic 303.1694 (1, 82) 0.0000

Chi-square 303.1694 1 0.0000

C(3) -0.314679 0.018073

Speed of adjustment (joint ECT and ΔE)

Wald Test:

Equation: Untitled

F-statistic 187.6480 (2, 82) 0.0000

Chi-square 375.2959 2 0.0000

C(1) 0.541544 0.028057

C(3) -0.314679 0.018073

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8 Restrictions are linear in coefficients.

General E-Y Long term (ECT)

Wald Test:

Equation: Untitled

F-statistic 52.37382 (1, 83) 0.0000

Chi-square 52.37382 1 0.0000

C(1) 0.196273 0.027121

Short term (ΔY)

Wald Test:

Equation: Untitled

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F-statistic 53.47012 (1, 83) 0.0000

Chi-square 53.47012 1 0.0000

C(3) -0.197731 0.027041

Speed of adjustment (joint ECT and ΔY)

Wald Test:

Equation: Untitled

F-statistic 26.73541 (2, 83) 0.0000

Chi-square 53.47083 2 0.0000

C(1) 0.196273 0.027121

C(3) -0.197731 0.027041

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10 Energy Efficiency model

Country results

Dependent Variable: EE Method: Panel Least Squares Date: 06/27/08 Time: 14:04 Sample: 1970 2006 IF D_CHINA=1 Cross-sections included: 1

Total panel (balanced) observations: 34

Variable Coefficient Std. Error t-Statistic Prob.

EA -2.40E-06 5.45E-07 -4.412541 0.0001

EI 6.92E-06 2.26E-06 3.067203 0.0045

IND_GDP -4.450152 2.461934 -1.807583 0.0807

C 5.410154 0.616623 8.773850 0.0000

R-squared 0.942730 Mean dependent var 2.317640 Adjusted R-squared 0.937003 S.D. dependent var 0.989632 S.E. of regression 0.248389 Akaike info criterion 0.162494 Sum squared resid 1.850920 Schwarz criterion 0.342065 Log likelihood 1.237610 F-statistic 164.6120

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Durbin-Watson stat 1.370931 Prob(F-statistic) 0.000000

Dependent Variable: EE Method: Panel Least Squares Date: 06/27/08 Time: 14:04

Sample: 1970 2006 IF D_GERMNY=1 Cross-sections included: 1

EA 1.29E-07 1.84E-08 6.970352 0.0000

EI -7.29E-06 1.62E-06 -4.491055 0.0001

IND_GDP 11.29861 0.982706 11.49746 0.0000

C -3.142402 0.447395 -7.023769 0.0000

R-squared 0.915502 Mean dependent var 0.390484 Adjusted R-squared 0.907053 S.D. dependent var 0.287311 S.E. of regression 0.087593 Akaike info criterion -1.922091 Sum squared resid 0.230178 Schwarz criterion -1.742519 Log likelihood 36.67555 F-statistic 108.3466 Durbin-Watson stat 1.160264 Prob(F-statistic) 0.000000

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12 Dependent Variable: EE

Method: Panel Least Squares Date: 06/27/08 Time: 14:03

Sample: 1970 2006 IF D_RUSSIA=1 Cross-sections included: 1

EA -2.47E-06 1.16E-05 -0.213331 0.8354

EI 2.26E-06 3.09E-06 0.732245 0.4808

IND_GDP -3.978631 5.465017 -0.728018 0.4833

C 4.646069 2.866819 1.620635 0.1362

R-squared 0.145521 Mean dependent var 1.812294 Adjusted R-squared -0.110822 S.D. dependent var 0.479038 S.E. of regression 0.504885 Akaike info criterion 1.705984 Sum squared resid 2.549087 Schwarz criterion 1.888571 Log likelihood -7.941885 F-statistic 0.567681 Durbin-Watson stat 1.233848 Prob(F-statistic) 0.648752

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Natural gas and coal prices and differentials in Russia ($/toe)

Sources: OECD 2004a, IET 2003, Goscomstat (2003)

Notes: NG Net export price (export price minus transportation cost);

NG Price differential (net export price minus domestic industrial consumers price)