Global export flow of Chilean copper: The role of environmental innovation and renewable energy transition

Abstract

Copper is one of the most important minerals that has extensive use in environment-friendly technologies and renewable energy generation. The global urgency for environmental and ecological conservation through renewable energy transition has considerably enhanced the importance of copper and articles thereof. Chile is a major producer of copper. It contributes more than one-third to global supply. Therefore, this study explores the export flow of Chilean copper in response to increasing demand side conditions in major 24 trading partners from 2002 to 2020. This objective is realized by constructing an augmented model for import demand that incorporates bilateral real exchange rate along with real GDP, environmental innovation, and renewable energy transition in major import markets. The estimated results of panel quantiles via moments techniques reveal a significant positive impact with increasing coefficients at higher quantiles, while environmental innovation and renewable energy transition in trading partners show significant positive impact with decreasing values of coefficients at higher quantiles. The findings urge Chile to enhance production capacity of copper and other critical mineral and improve participation in global value chain to meet sharply increasing copper demand from environmental innovation and renewable energy transition.