The Efficacy of Energy Production and Economic Growth in Aggregate Energy Consumption: A Panel Data Evidence from Selected OIC Countries

Abstract

This paper examines correlated variables of energy resources and growth, and their contribution in aggregate energy consumption. Its main objective is to identify the efficacy of energy, as well as to find out to which extent an economy is based on energy in order to extrapolate whether it is highly linked to energy-based industries or not. For this purpose, an empirical model is regressed for the logarithmic annual stationary data of selected OIC countries over the period 1991-2010. The results reveal that the GDP growth in Saudi Arabia has led to reduced levels of aggregate energy consumption, and does not for the UAE in the short-run. Moreover, the economies of Malaysia and Libya are highly linked to energy use especially natural gas in the long-run. And vice versa for Algeria and Indonesia in which the crude oil and natural gas production are not statistically significant.