Modelling the Non-Linear Energy Intensity Effect Based on a Quantile-on-Quantile Approach: The Case of Textiles Manufacturing in Asian Countries

Muhammad Haseeb,Leonardus Ww Mihardjo,Sebastian Kot,Piotr Saługa,Hafezali Iqbal Hussain

doi:10.3390/en13092229

Abstract

The objective of the current examination is to identify the dynamic relationship between the textile industry and energy intensity. The study evaluates the asymmetric impact of textile manufacturing on energy intensity in leading Asian economies based on textile dominance. China, Indonesia, India, Pakistan, Bangladesh, Malaysia, South Korea, Thailand, Japan and Vietnam are dominant in textile manufacturing. In the present study we used yearly textiles and clothing data from top ten selected Asian textile manufacturing countries from 1990 to 2018. The results of quantile-on-quantile regression (QQ) confirmed that textiles and clothing (T&C) production have a positive and significant impact on energy intensity in all countries. The results further suggested that a low level of T&C production increases the level of energy intensity in all selected countries. On the other hand, the results of Granger causality in quantiles confirm a bidirectional causal relationship between T&C production and energy intensity in all selected countries except Thailand and Japan, where a uni-directional causal connection between textile and clothing manufacturing and energy intensity can also be found. This study recommends that governments and investors need to invest more in green and advanced technologies to reduce the energy intensity in Asian economies.

Highlights

Industrialization has a positive impact on several economic indicators and is an important factor in the growth of many countries
We evaluate the asymmetric impact of textile manufacturing on energy intensity in leading Asian economies based on the dominance of their textile industries in a global context
The current study has evaluated the asymmetric impact of textile manufacturing on energy intensity of ten leading Asian economies based on textile dominance

Summary

Introduction

Industrialization has a positive impact on several economic indicators and is an important factor in the growth of many countries. Benefits of industrial development include job creation, augmented trade, increased economy of scale and technological progress [1]. Since the start of the First Industrial. Revolution, the textile industry has been considered an important part of world economy. This industry has historical roots dating back to 3000 BC [2,3]. The prominence of the textile industry is notable for generating foreign exchange through trade expansion, in emerging economies [3].

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