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Sustainability 2018, 10(2), 565; https://doi.org/10.3390/su10020565

The Economic Determinants of Bioenergy Trade Intensity in the EU-28: A Co-Integration Approach

Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor DE, Malaysia
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Received: 9 December 2017 / Revised: 9 January 2018 / Accepted: 10 January 2018 / Published: 24 February 2018
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Abstract

This paper examines the dynamic effect of the economic determinants on bilateral trade intensity of the European Union (EU) region’s bioenergy industry outputs. The authors adopt the panel co-integration model approach to estimate annual trade intensity data of the EU-28 countries’ bioenergy industry outputs from 1990 to 2013. This study investigated the long-term influence of the rate of real exchange, gross domestic product (GDP), and export price on the trade intensity of bioenergy industry applying fully modified oriented least square (FMOLS), dummy oriented least square (DOLS), and pooled mean group (PMG) models. In the current study, the findings boost the empirical validity of the panel co-integration model through FMOLS, indicating that depreciation has improved the trade intensity. This study has further investigated, through the causality test, a distinct set of countries. FMOLS estimation does find proof of the long run improvement of trade intensity. Thus, the result shows that the gross domestic product (GDP) and the real exchange rate have a positive and noteworthy influence on the EU-28 region trade intensity of the bioenergy industry. Moreover, the export price affects negatively and significantly the trade intensity of the bioenergy industry in the EU-28 countries. View Full-Text
Keywords: bioenergy industry; trade intensity; European bioenergy industry; trade intensity; European
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Alsaleh, M.; Abdul-Rahim, A.S. The Economic Determinants of Bioenergy Trade Intensity in the EU-28: A Co-Integration Approach. Sustainability 2018, 10, 565.

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