Dynamics of technological innovation, energy consumption, energy price and economic growth in Denmark

Murad, Md Wahid and Alam, Md Mahmudul and Noman, Abu Hanifa Md and Ozturk, Ilhan (2018) Dynamics of technological innovation, energy consumption, energy price and economic growth in Denmark. Environmental Progress & Sustainable Energy, 38 (1). pp. 22-29. ISSN 1944-7442

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Official URL: https://doi.org/10.1002/ep.12905

Abstract

This study investigates the dynamic relationships between technological innovation, consumption of energy, energy price, and economic growth in Denmark during the period from 1970 until 2012, using multivariate setting to examine time-series data. The analysis employs the autoregressive distributed lag (ARDL) approach to co-integration to examine both the short and long run dynamics among the variables. Furthermore, the study uses the Granger procedure within the VAR framework to identify causality among the variables. The model used in this study is found to be sound, a diagnosis of the reliability of the model reached by testing normality, functional form, serial correlation, and heteroscedasticity, with stability of the model tested using a cumulative sum and cumulative sum square test, based on recursive regression residuals. The ARDL approach to co-integration reveals that real GDP growth positively influences energy consumption as well as significantly in both the short run and long run, while energy prices and technological innovation influence energy consumption negatively and significantly. The results ascertain that energy consumption and economic growth are independent of each other, and thus they support a neutral hypothesis for Denmark. Besides, both the technological innovation and energy prices are found to be Granger cause energy consumption. Therefore, the study suggests that Denmark should adopt conservative energy policy using technological innovation and energy prices as instruments to achieve energy security and protect the environment from pollution. © 2018 American Institute of Chemical Engineers Environ Prog, 38: 22–29, 2019. © 2018 American Institute of Chemical Engineers

Item Type: Article
Uncontrolled Keywords: Denmark; economic growth; energy consumption; energy price; Technological innovation
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions: Faculty of Business and Accountancy > Dept of Finance and Banking
Depositing User: Ms. Juhaida Abd Rahim
Date Deposited: 03 Mar 2020 06:28
Last Modified: 03 Mar 2020 06:28
URI: http://eprints.um.edu.my/id/eprint/23931

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