Research Article

What Determines the Fuel Exports: The Case of Norway

Emmanouil Karakostas
University of Piraeus, Greece
* Corresponding author
DOI icon 10.24018/ejenergy.2022.2.1.40

Read Counter
520

Downloads
348

Citations

Share

Article Sidebar

Submitted 2021-12-18
Published 2022-01-27

Read counter = 520 times

Table of Contents

Article Main Content

Energy today is a key factor in economic growth. The reason why energy is today an essential factor for the development of a country is its inelastic demand. Securing energy resources is a key component of many states' trade policy. Within this framework of energy security for many countries, Norway has a remarkable presence. The main reason is the rich mineral wealth that Norway possesses. But that's not the only reason. Many countries, although they have rich mineral resources, are nevertheless “captive” in the rich cradles of mineral resources without wishing to diversify their production (“Dutch Disease” - “The Curse of Resources”). These countries usually have the effect of revaluing their currency and linking it to the dominant world currency. Norway, because of the global energy market, must reform its energy policy in such a way that it can be competitive. This study will attempt to investigate those factors that determine energy exports. Having Norway as a case study, the present research effort will set a framework for the interpretation of energy exports. The methodology applied is multiple Regression Analysis - Ordinary Least Squares (OLS).

Keywords: Fuel Exports, Norway, OLS

References

  1. Thapa-Parajuli R, Aryal S, M. Alharthi M, Paudel RC. Energy consumption, export performance and economic growth in a landlocked developing country: The case of Nepal. AIMS Energy. 2021; 9(3):516–533.
     Google Scholar
  2. Asghar Z. Energy–GDP Relationship: A Causal Analysis for the Five Countries of South Asia. Applied Econometrics and International Development. 2008; 8-1:167-180.
     Google Scholar
  3. Georgescu-Roegen N. The Entropy Law and the Economic Process. Harvard University Press, 1971.
     Google Scholar
  4. Austvik OG. Norway: Small State in the Great European Energy Game. International Political Economy Series. 2019.
     Google Scholar
  5. Hamlehdar M, Aslani, A. Analysis of Energy System in Norway with Focus on Energy Consumption Prediction. Management of Sustainable Development Sibiu. 2017; 9(1): 5-14.
     Google Scholar
  6. Rasche R, Tatom J. The effects of the new energy regime on economic capacity, production, and prices. Review, Federal Reserve Bank of St. Louis, 1977; May: 2-12.
     Google Scholar
  7. Rasche R, Tatom J. Energy price shocks, aggregate supply and monetary policy: the theory and the international evidence. Carnegie-Rochester Conference Series on Public Policy. 1981; 14(1): 9-93.
     Google Scholar
  8. Darby M. The Price of oil and World inflation and Recession. American Economic Review. 1982; 72(4): 738-751.
     Google Scholar
  9. Hamilton J. Oil and the Macroeconomy Since World War II. Journal of Political Economy. 1983; 91: 228-248.
     Google Scholar
  10. Burbidge J, Harrison A. Testing for the Effects of Oil-Price Rises using Vector Autoregressions. International Economic Review. 1984; 25(2): 459-84.
     Google Scholar
  11. Santini D. The Energy-Squeeze Model: Energy Price Dynamics in U.S. Business Cycles. International Journal of Energy Systems. 1985; 5: 18-25.
     Google Scholar
  12. Gisser M, Goodwin T. Crude Oil and the Macroeconomy: Tests of Some Popular Notions. Journal of Money, Credit, and Banking. 1986; 18: 95-103.
     Google Scholar
  13. Hooker MA. What Happened to the Oil Price-Macroeconomy Relationship? Journal of Monetary Economics. 1996; 38: 195-213.
     Google Scholar
  14. Rotemberg J, Woodford M. Imperfect Competition and the Effects of Energy Price Increases on Economic Activity. Journal of Money, Credit and Banking. 1996; 28(4): 550-577.
     Google Scholar
  15. Bernanke B, Gertler M, Watson M. Systematic Monetary Policy and the Effects of Oil Price Shocks. Brookings Papers on Economic Activity. 1997; 1: 91-157.
     Google Scholar
  16. Barsky R, Kilian L. Oil and the Macroeconomy Since the 1970s. Journal of Economic Perspectives. 2004; 18(4): 115-134.
     Google Scholar
  17. Lee K, Ni S, Ratti RA. Oil shocks and the Macroeconomy: The role of Price Variability. Energy Journal. 1995; 16(4): 39-56.
     Google Scholar
  18. Papapetrou E. Oil prices shocks, stock market, economic activity and employment in Greece. Energy Economics. 2001; 23: 511-532.
     Google Scholar
  19. Miguel C, Manzano B, Martin-Moreno J. Oil price shocks and aggregate fluctuations. The Energy Journal. 2003; 24(2): 47-61.
     Google Scholar
  20. Limin D, He Y, Chu W. The relationship between oil price shocks and China's macro-economy: An Empirical analysis. Energy Policy. 2010; 38(8): 4142-4151.
     Google Scholar
  21. Cunado J, Perez de Gracia F. Do oil price shocks matter? Evidence from some European countries. Energy Economics. 2003; 25: 137-154.
     Google Scholar
  22. Mehrara M, Oskoui K. The source of macroeconomic fluctuations in oil exporting countries: A comparative study. Economic Modelling. 2007; 24(3): 365-379.
     Google Scholar
  23. Herzer D, Nowak-Lehmann FD, Siliverstovs B. Export-led growth in Chile: Assessing the role of export composition in productivity growth. Developing Economies. 2006; 44(3): 306-328.
     Google Scholar
  24. Hosseini SMP,Tang CF. The effects of oil and non-oil exports on economic growth: A case study of the Iranian economy. Economic Research-Ekonomska Istraživanja. 2014; 27(1): 427-441.
     Google Scholar
  25. Kalaitzi AS, Cleeve E. Export-led growth in the UAE: Multivariate causality between primary exports, manufactured exports and economic growth. Eurasian Business Review. 2017; 8(3): 341-365.
     Google Scholar
  26. Myrdal G. Economic theory and under-developed regions. London: Gerald Duckworth and Co. 1957.
     Google Scholar
  27. Kalaitzi AS, Chamberlain TW. Fuel-mining exports and growth in a developing state: The case of the UAE. International Journal of Energy Economics and Policy. 2020; 10(4): 300-308.
     Google Scholar
  28. Corden WM, Neary JP. Booming sector and de-industrialisation in a small open economy. The Economic Journal. 1982; 92(368):825–848.
     Google Scholar
  29. Sachs JD, Warner AM. Natural resource abundance and economic growth. National Bureau of Economic Research, Working Paper. 1995; 5398.
     Google Scholar
  30. Papyrakis E, Gerlagh R. Resource abundance and economic growth in the United States. European Economic Review. 2007; 51(4): 1011–1039.
     Google Scholar
  31. Iimi A. Escaping from the resource curse: evidence from Botswana and the rest of the world. IMF Staff Papers. 2007; 54: 663–699.
     Google Scholar
  32. Bellemare MF, Barrett CB, Just DR. The welfare impacts of commodity price volatility: evidence from rural Ethiopia. American Journal of Agricultural Economics. 2013; 95(4): 877–899.
     Google Scholar
  33. Dwyer A, Gardner G, Williams T. Global commodity markets–price volatility and financialization. Reserve Bank of Australia. 2011; 49–57.
     Google Scholar
  34. Tujula M, Wolswijk G. What determines fiscal balances? An empirical investigation in determinants of changes in OECD budget balances. Working Paper Series No. 422 / December 2004, European Central Bank. 2004.
     Google Scholar
  35. Dehn J. Commodity price uncertainty in developing countries, World Bank, [Internet]. 2000 Available from: https://doi.org/10.1596/1813-9450-2426
     Google Scholar
  36. De Ferranti D, Perry GE, Lederman, D, Maloney WE. From natural resources to the knowledge economy: trade and job quality, World Bank. [Internet]. 2002 Available from: https://doi.org/10.1596/0-8213-5009.
     Google Scholar
  37. Masten SE, Crocker KJ. Efficient adaptation in long-term contracts: take-or-pay provisions for natural gas. The American Economic Review. 1985; 75(5): 1083–1093.
     Google Scholar
  38. Gylfason T. Natural resources, education, and economic development. European Economic Review. 2001; 45(4-6):847–859.
     Google Scholar
  39. Lam R, Wantchekon L. Political Dutch disease, manuscript. Department of Politics. New York University. [Internet]. 2003 Available from: http://neumann.hec.ca/neudc2004/fp/wantchekon_leonard_avril_16.pdf.
     Google Scholar
  40. Hodler R. The curse of natural resources in fractionalized countries. European Economic Review. 2006; 50(6): 1367–1386.
     Google Scholar
  41. Deacon RT, Rode A. Rent seeking and the resource curse. 2015; X–X.
     Google Scholar
  42. Stern D. A multivariate cointegration analysis of the role of energy in the US macroeconomy. Energy Economics. 2000; 22(2): 267-283.
     Google Scholar
  43. Oh W, Lee K. Causal relationship between energy consumption and GDP revisited: the case of Korea 1970–1999. Energy Economics. 2004; 26(1): 51-59.
     Google Scholar
  44. Soytas U, Sari R. Energy consumption and GDP: causality relationship in G-7 countries and emerging markets. Energy Economics. 2003; 25(1): 33-37.
     Google Scholar
  45. Sari R, Ewing BT, Soytas U. The relationship between disaggregate energy consumption and industrial production in the United States: An ARDL approach. Energy Economics. 2008; 30(5): 2302-2313.
     Google Scholar
  46. Narayan PK, Smyth R. Energy consumption and real GDP in G7 countries: New evidence from panel cointegration with structural breaks. Energy Economics. 2008; 30(5): 2331-2341.
     Google Scholar
  47. Mehrara M. Energy consumption and economic growth: The case of oil exporting countries, Energy Policy. 2007; 35(5): 2939-2945.
     Google Scholar
  48. Halicioglu F. An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy. 2007; 37(3): 1156-1164.
     Google Scholar
  49. Narayan PK, Smyth R. Electricity consumption, employment and real income in Australia evidence from multivariate Granger causality tests. Energy Policy. 2005; 33(9): 1109-1116.
     Google Scholar
  50. Lee CC. The causality relationship between energy consumption and GDP in G-11 countries revisited. Energy Policy. 2006; 34(9): 1086-1093.
     Google Scholar
  51. Lee CC, Chang CP. Energy consumption and GDP revisited: A panel analysis of developed and developing countries. Energy Economics. 2007; 29(6): 1206-1223.
     Google Scholar
  52. Masih AMM, Masih R. On the temporal causal relationship between energy consumption, real income, and prices: Some new evidence from Asian-energy dependent NICs Based on a multivariate cointegration/vector error-correction approach. Journal of Policy Modeling. 1997; 19(4): 417-440.
     Google Scholar
  53. Asafu-Adjaye J. The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries. Energy Economics. 2000; 22(6): 615-625.
     Google Scholar
  54. Ghali ΚΗ, El-Sakka Μ. Energy use and output growth in Canada: a multivariate cointegration analysis. Energy Economics. 2004; 26(2): 225-238.
     Google Scholar
  55. Erol U, Yu ESH. On the causal relationship between energy and income for industrialized countries. Journal of Energy Development. 1987; 13: 113–122.
     Google Scholar
  56. Payne JE. On the dynamics of energy consumption and output in the US. Applied Energy. 2009; 86(4): 575-577.
     Google Scholar
  57. Akinlo ΑΕ. Energy consumption and economic growth: Evidence from 11 Sub-Sahara African countries. Energy Economics. 2008; 30(5): 2391-2400.
     Google Scholar
  58. Altinay G, Karagol E. Electricity consumption and economic growth: Evidence from Turkey. Energy Economics. 2005; 27(6): 849-856.
     Google Scholar
  59. Hutcheson GD. Ordinary Least-Squares Regression. The SAGE Dictionary of Quantitative Management Research. 2011; 224-228.
     Google Scholar
  60. WITS. Norway Fuel Export Product Share to World. [Internet]. 2021 Available from: https://wits.worldbank.org/CountryProfile/en/Country/NOR/StartYear/1993/EndYear/2019/TradeFlow/Export/Indicator/XPRT-PRDCT-SHR/Partner/WLD/Product/Fuels.
     Google Scholar
  61. WITS. Norway Fuel Revealed comparative advantage to World. [Internet]. 2021 Available from: https://wits.worldbank.org/CountryProfile/en/Country/NOR/StartYear/1993/EndYear/2019/TradeFlow/Export/Indicator/RCA/Partner/WLD/Product/Fuels.
     Google Scholar
  62. WITS. Norway Intermediate goods Export Product Share to World. [Internet]. 2021 Available from: https://wits.worldbank.org/CountryProfile/en/Country/NOR/StartYear/1993/EndYear/2019/TradeFlow/Export/Indicator/XPRT-PRDCT-SHR/Partner/WLD/Product/UNCTAD-SoP2.
     Google Scholar
  63. OECD. Exchange rates Total, National currency units/US dollar, 1993 – 2018. [Internet]. 2021 Available from: https://data.oecd.org/conversion/exchange-rates.htm.
     Google Scholar
  64. OECD. Multifactor productivity Total, Annual growth rate (%), 1993 – 2018. [Internet]. 2021 Available from: https://data.oecd.org/lprdty/multifactor-productivity.htm.
     Google Scholar
  65. OECD. Industrial production Total, 2015=100, 1993 – 2018. [Internet]. 2021 Available from: https://data.oecd.org/industry/industrial-production.htm.
     Google Scholar
  66. World Bank. GDP growth (annual %) - France, Sweden, United Kingdom, Germany, Netherlands. [Internet]. 2021 Available from: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=FR-SE-GB-DE-NL.
     Google Scholar