Energy intensity and green energy innovation: Checking heterogeneous country effects in the OECD

Abstract

Over the recent years, there has been evidence of a decline in energy intensity worldwide. Most of this decline was industry or sector specific. The main aim of the quantitative analysis is to enhance the understanding of how green energy innovative activities are entangled with energy intensity in the OECD through models that take into account heterogeneity and serial correlation. The existing literature does not fully address this country related heterogeneity in either the short- or long-run scales. We use some specific estimators that address those key econometric issues. The analysis specifically focuses on the dynamics of green energy innovation and finds the existence of both short-term and long-term relationships between energy intensity and green energy innovative activities, though this relationship loses its significance over time.