Research Information System
ENERGY AND ENVIRONMENTAL STRATEGIES IN THE ERA OF GLOBALIZATION, pp.195-220, 2019 (SCI-Expanded, SSCI, Scopus)
In this study, we investigate how total factor productivity (TFP), alongside income, price, and population, shapes energy consumption in the long-run in Saudi Arabia, the world's number one oil exporter. To do so, we first estimate a production function and construct the associated TFP series, and then assess TFP's impact on energy consumption. To take into consideration the stochastic properties of the variables, we employ unit root and cointegration methods. We also correct estimations and test results for potential small sample bias. Our main finding is that TFP has a statistically significant impact on energy consumption in the long-run. The main contribution of our research is that to the best of our knowledge this is the first study that estimates energy consumption effects of TFP for Saudi Arabia. We believe that our research would be useful for Saudi Arabian policymakers in understanding how TFP, a representation of technological progress, institutional development, innovations, openness, and R&D development, influences energy consumption over time. Saudi Vision 2030, the strategic road map of Saudi Arabian development, implies rational behavior and lowering the pace of energy consumption in the country. Thus, TFP improvement is a sustainable way to attain these goals.