Examining the Relationship between Economic Development, Diversification and Trade Liberalization to Energy Intensity in Iranian Agricultural Sector

Shabanzadeh, Mehdi; Taheri, Emran; Farshid Riahi Dorche, Farshid

Document Type : ORIGINAL ARTICLE

Authors

¹ Ph.D. Student in Agricultural Economics, Tehran University, Tehran, Iran

² M.A. Student in Agricultural Economics, Tehran University, Tehran, Iran

³ M.A. in Agricultural Economics, Tehran University, Tehran, Iran

Abstract

Iran as a developing country, having massive energy resource endowments is one of the examples of growth pattern with pressure on natural resources. energy as inputs in agriculture of Iran has particular importance. Reviewing the energy consumption in the agricultural sector, shows that, along with increased production and consumption of energy, including oil products and electricity, the value added of this sector is increased during the different years. But the fundamental question that arises is what causes the expansion of energy consumption in the agricultural sector of Iran. Is this increase was influenced by the expansion of trade and development? With this approach, in this study was investigated the relationship between economic development, diversification, trade liberalization and energy intensity in agriculture of Iran. In order to achieve this goal, by using modeling algorithms Fomby, relationship between diversification index, the share of agriculture in GDP and trade liberalization with energy intensity identifying and then in the framework of Johansen-Juselius cointegration model was examined for the period 1981-2012. The drought in 2008 as an effective dummy variable were considered in the short term. The results of this study showed existence of long-term relationship between the variables. So that, the effect of diversification and trade liberalization on energy intensity were positive and effects of share of agriculture was negative on energy intensity. The diversification was the most effective variable on energy intensity index. Because with a 1% increase in diversification, energy intensity will be reduced by 12.31%. The error correction coefficient was significant at the level of 1%. This subject shows that energy intensity shall be adjusted towards the long-run equilibrium by 0.09% per year.

Keywords

20.1001.1.22285954.1396.7.27.9.1

Main Subjects

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Economic Growth and Development Research

Examining the Relationship between Economic Development, Diversification and Trade Liberalization to Energy Intensity in Iranian Agricultural Sector

References

References

Volume 7, Issue 27 - Serial Number 27
July 2017
Pages 143-156

Examining the Relationship between Economic Development, Diversification and Trade Liberalization to Energy Intensity in Iranian Agricultural Sector

References

References

Volume 7, Issue 27 - Serial Number 27July 2017Pages 143-156

Volume 7, Issue 27 - Serial Number 27
July 2017
Pages 143-156